A news item, which might be of interest to our followers, just caught my eye.
The National Association of Pension Funds (NAPF) has just released their Spring Workplace Pension Survey, and it includes some early reaction to the “freedom of pensions” proposals put forward by George Osborne in his Budget speech.
For those interested, the article can be viewed here: https://www.corporate-adviser.com/2009672.article?cmpid=canews_250322
The NAPF represent the some of the largest pension schemes in the UK - so these stats are an important marker. Amongst the swathe of stats covered in the article, the two key ones for me are:
- That many savers might take all their retirement fund as cash rather than pension
- That many savers would be encouraged to save more (or start saving) into pensions as a result of these proposals
These two findings are inextricably linked.
The access to the entire savings fund at retirement clearly carries an inherent risk that some savers may “burn out” their retirement savings early - and then have no choice but to fall back on the State to survive in the later years of retirement.
Yet this same freedom of access clearly acts as an incentive to those savers who were previously wary of a pension system which allowed only nominal access to funds at retirement age.
Only time will tell if the benefit outweighs the risk. Yet it is already clear that these proposals have made the topic of pensions a much more meaningful and relevant one to many savers. And this increased engagement could well be key in the battle to narrow the UK savings gap.
Best regards
Steve
Recent Comments