• 35% of the population want the government to introduce incentives for young people to save for retirement
• Only a quarter (23%) of the population think current savings and pension policy is fair
• Aegon calls for Autumn Statement to focus on ’reinforcement not reinvention’ of benefits of saving
When asked specifically what they would like to see from Philip Hammond next week, the 2000 respondents called for the following actions:
• a third (34%) wanted a reduction in taxes
• 32% requested greater spending on public services
• 30% insisted on measures to stabilise the economy ahead of Brexit
• a quarter (25%) demanded support for Britain’s struggling industries
• 19% hope for more spending on welfare benefits.
When it comes to pensions, the call for change is prompted by a perception of inequality in the system, with wealthy savers faring better from government savings policy than those with lower incomes. With nearly half (45%) of the population deeming current savings and pension policy to be unfair the government has some way to go to show ‘fairness’ is at the heart of its savings agenda.
Between Brexit, the prospect of rising inflation and an uncertain geopolitical environment, the Chancellor has no shortage of issues to address at the dispatch box. Given his predecessor’s repeated changes to pensions (but decision not to advance radical reforms of pensions tax relief last April) Philip Hammond may choose to create some welcome stability for pensions by letting things bed down.
There’s clearly a case for focusing on helping people understand what options already exist, for example, the Lifetime ISA, set to launch in April 2017, is a case in point. A third (33%) of the population have never heard of it, and a further 36% don’t understand how it could help them. The LISA is available only to under 40s, so in light of Aegon’s findings that people want to see more done for younger savers, the lack of awareness is disappointing.
Steven Cameron, Pensions Director at Aegon said: “Our research shows a consensus across all age groups that more needs to be done to encourage younger people to save for their retirement. This is good news. The sooner someone starts saving for retirement, the more likely they are to be able to meet their retirement aspirations. And unlike previous generations, they will not retire with generous defined benefit pensions.
“Early indications are that younger employees are taking advantage of automatic enrolment and are not opting out of workplace pensions. We need to ensure this continues as the minimum employee contributions begin to rise in 2018.
“The Lifetime ISA was the previous Chancellor’s initiative to help under 40s save for a first home or for retirement. To make it successful, it needs to be visible and understood. But if it increases opt outs from workplace pensions, young savers will lose valuable employer contributions, setting them further back on the road to a comfortable retirement.
“Given the constant change it’s hardly surprising that many are unaware of the incentives already in place to help people start saving early in life. And for younger age groups, it’s all too easy to leave starting saving till a later date. So we hope the Chancellor’s first Autumn Statement is one of reinforcement not reinvention of the benefits of saving.”
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