IMA has responds to the RSA report "seeing through British pensions". Richard Saunders, Chief Executive of the Investment Management Association, said:
"This report mixes up some fair points with sensationalist headline-seeking. In particular it does itself no favours by quoting discredited research which exaggerates the cost of managing pension investments many times over.
"But nobody disputes that charges and costs are important and need to be disclosed in an accessible and meaningful way. For retail funds there is already a gold standard of charges disclosure, mandated under EU rules put together after extensive consultation and consumer research. We need that standard rolled out across the whole pensions and long-term savings market. The IMA also believes transaction costs can and should be better disclosed, and has made a proposal to its members to achieve this*.
"The RSA chose not to consult the IMA in preparing this report. That is a pity but we stand ready to co-operate with it or any other body wishing to examine this area. We will resolve these issues only by working together, not by periodically lobbing hand grenades into the public debate, which simply fuel the mistrust of pension saving that the report's authors say they want to address."
Andy Zanelli, head of retirement planning, AXA Wealth, also commented on the ONS Pension Trends report.
“This drop in private pension contributions is indicative of the difficult economic times across the UK, but is further evidence of a worrying trend.
“It is understandable that people are looking to make cut-backs and savings from their monthly outgoings, as they continue to feel the pinch and struggle financially. Postponing pension contributions can provide immediate relief in the short-term. However, the long-term effect could be considerable and reduce income in retirement if they stop for a prolonged period of time. People need to be aware that making up the shortfall in contributions could take years to achieve and ultimately delay plans for retirement.
“With people living so much longer today, many will see their pension as a rather remote concept, and this even further increases the importance of education. People should seek professional advice to better understand the consequences of postponing pension contributions, allowing them to make informed decisions about their finances.”
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