Last week, however, the tone changed. Now the press bemoans the miniscule amounts the rest of us mere mortals pay into our own plans. Almost half of 41-60-year-olds aren’t saving for their pension, along with 64% of the under-30s, according a BBC-commissioned Gfk NOP survey.
Figures from the Association of British Insurers also showed that the amount people saved on a regular basis into personal pensions dropped by 11% during Q1, compared with the same period in 2008. Lump-sum investments also dropped by 28% year on year.
This isn’t surprising given the economic climate, but I do wonder what effects the recent Budget will have on personal pensions. While the tax relief changes only directly affect the top 1.5% of earners, surely the government understands there will be wider ramifications – though I’ve often heard it said that this government will go down in history as the government of unintended consequences.
Continually changing the tax rules garners a distrust of pensions. And of course, it’s not just the tax rules that change, it’s the pensions ministers too. With a June reshuffle likely and a general election not far off, I implore all political parties to seriously consider maintaining status quo in their Department for Work and Pensions. How can the public keep faith in retirement saving if the political leaders cannot keep faith with the ministers in charge of it?
