Pensions minister Torsten Bell has been urged to create a long-term savings commission and ensure “political consensus” on long-term savings policy.
Has this bottle of one pound coins got much to do with a pension?
What follows is my commentary on what the savings industry is doing to take away our wish to have a pension,.
In an open letter to Bell and other decision-makers, Nucleus Financial Platforms called for a long-term savings commission and joined-up action on pensions policy.
OMG, we had a commission at the start of the century, it went well, why have another?
The letter referenced the “pre and post Budget uncertainty” which has prompted increased member withdrawals from pension savings, in addition to inheritance tax changes affecting retirement funds, the abolition of the lifetime allowance and “ongoing speculation” on individual savings accounts changes.
These are the worries of the upper middle classes who have more concern about wealth than about income. This is a lift of concerns garnered from IFAs.
The firm said numerous changes and an “uncertain policy landscape” may have led to saver discouragement with long-term savings, adding the government needs to focus on “greater confidence and knowledge in retirement planning” alongside its growth ambitions.
This is code for the savings industry getting worried that people aren’t confident and knowledgeable about giving their money to Nucleus and similar savings outfits.
Its letter – which is the third iteration of the firm’s request for a “non-departmental government commission” on long-term savings and follows its recent findings on low saver confidence in retirement – added that a boost to retirement funds would “help inject more capital into investment” which would help both the economy and savers.
Low saver confidence in retirement is an odd thing for a savings institute to worry about. We have workplace pensions which is working to provide pensions rather than pots.
Letter author and Nucleus technical services director Andrew Tully said: “It’s never been clearer that the UK public needs to start planning and saving for later life much, much earlier. But they need support from a pensions system that is consistent, stable and encourages long-term saving. Auto-enrolment was a recommendation by a Pensions Commission reporting in 2004 and 2005, which has been a great step forward in encouraging more people to save for their retirement.
So it’s down to the pension system which is not providing consistent, stable and long-term saving. Just what this has to do with pensions is not clear.
“However more needs to be done and we firmly believe that establishing an independent savings commission could again make balanced recommendations to encourage long-term savings, while promoting greater consistency in pension and savings rules.
This is the first stage in a nonsensical conclusion to the article.
“The government clearly has a focus on boosting economic growth and is looking at the role pension savings can play in this. We firmly believe that their growth agenda will have more chance of succeeding if people feel confident to save and invest for their future.”
Putting money into savings does not mean boosting the economy, if saving does anything, it removes money from economic circulation. The only way economic advantage occurs to the nation is if the money saved is invested.
Articles such as this, promoting organisations such as Nucleus as pension providers are not helpful. What we need is a commission to root out nonsense such as this.