Ray Chinn comments on Centre for Policy Studies (CPS) proposals

Ray Chinn, Head of Pensions at insurance, investment and pensions group LV= comments on Centre for Policy Studies (CPS) proposals to stimulate a long-term savings culture:

“Michael Johnson’s ideas merit serious exploration and debate within Westminster and Whitehall. But they cannot succeed without the Government first stepping forward in full support of pension provision and savings, urging people to consider their long-term position, and helping them take steps to improve it.

“Right now people don’t trust that the Government will support them; for instance nearly four times as many over-50s are expecting to be worse off under the coalition than those that expect their financial position to improve*. We’re encouraged by the Chancellor’s recent noises on long-term saving, and the Emergency Budget will be an early high profile opportunity for him to renew public interest and faith in pensions and saving for the future.”

On the CPS’s specific recommendation to enable limited early access to pension savings, which the Government is already considering, Ray Chinn comments:

“We’ve asked people over the age of 50 whether early access to their pension pots would have changed their saving behaviour*. Despite the backdrop of the recession, one in four believe they would have saved more into their pension. This suggests that this flexibility would be a substantial and valuable stimulus to long-term saving.”

* A survey of the UK’s over-50s carried out last week for LV= found that:

• 39% expect to be worse off under the Conservative/Liberal Democrat coalition, while just 11% expect their position to improve. 
• 24% believe that had they been allowed access to some of their pension fund at a number of points (for instance life stages like the birth of a child), this would have encouraged them to save more into their pension. Seven per cent believe they would have saved less, and 56% say it would have made no difference.