Downturn hits pensions savings

It has been suggested following recent research that the economic downturn and financial meltdown that has been seen over the past couple of years has had a serious negative impact on pensions savings amongst consumers in the UK. Many have found themselves struggling to make ends meet financially, and this means that they have had to make other financial sacrifices, which for some has meant their pensions provisions.

Scottish Widows, the pensions and life insurance provider, carried out the research and according to the results of the study there has been a fall of around 6 percent in pensions savings over the past year, with the total now falling to 48 percent. This is said to be the lowest it has been since 2006.

The study showed that 41 percent of people said that the reason that they had been saving less – or saving nothing in some cases – was due to the economic downturn. Women aged fifty and over were found to have been worst hit, and whilst 52 percent of women in this age group put enough money aside for retirement last year this feel to just 38 percent.

Officials from Scottish Widows said that the effects of the global financial crisis were only just starting to affect the pensions savings market even through the crisis began back in 2007. Many people were found to be failing to put any money aside at all for their retirement, including many of those that were nearing retirement age such as the over fifties age bracket.

An official from Scottish Widows said: “The whole nation is feeling worse off than a year ago and this is really starting to take its toll on pensions savings. While there are signs that the economy is recovering, the nation’s saving habits paint a very different story.”

Tags: retirement, investment, scottish widows, finance, Pension

Pensioners losing most of their income from savings

For many pensioners having their life savings in a higher interest savings account has become an effective way to boost their pensions with additional income over recent years, with many enjoying a substantial boost to their pensions because of the monthly income they earned from the interest on their savings. Read more

Tags: savings, recent years, base rate, food, pensioners

Compensation for Standard Life clients

In a recent report it has been revealed that Standard Life will indeed by compensating a number of its policyholders following controversy over its Pension Sterling Fund, which recently hit the headlines after policyholder suffered losses and industry groups claimed that the literature that Standard Life had sent out was misleading. Read more

Tags: Business Finance, opportunity, standard life, policyholder suffered losses, funds, investments, pension sterling fund, Pension

Brits admit saving less for retirement

As the prices of food and fuel continue to increase, Britons admit they are saving less for their retirement, a new report reveals.

Research published by financial services firm Edward Jones has shown that many people are cutting down on such savings in order to meet their everyday living costs.

Andrew James, retirement planning manager at the firm, said the findings are a “big concern”.

People who fail to save sufficiently for their old age are likely to face issues in the future, he continued.

Mr James also expressed worry that 23 per cent of those questioned admitted failing to save any money towards their pensions.

“It is imperative the government and all those involved in the pensions industry do all they can to keep driving the message home that people must continue to make provisions for their retirement,” he urged.

Earlier this month, financial services firm Life Trust warned that because people are living longer than ever, many could be forced to re-think their financial strategies for retirement.

Tags: big concern".People, concern, report, Pension, life trust, provisions, findings, personal finance

Pensioners likely to ‘rely more on savings’

Pensioners are expected to increasingly rely on their savings as their as pensions are gradually offering lower payouts, the director of Churchouse Financial Planning has said.

Keith Churchouse said that it is likely to become more common for people to dip into their savings as they become older and retire as they will probably be unable to rely on their pensions.

He noted that some people are hesitant about paying money into a pension scheme and those who choose not to have a personal account may find themselves dependent on the government in the future.

Mr Churchouse went on to say: “However, I don’t know whether the government has the view that if you actively opt out of the scheme, there is going to be a caveat to say that you can’t pop back to the state later.”

According to the Fidelity Retirement Index, the average household can expect to live off 42 per cent of their current income when they stop working full-time, which is far below the two-thirds that the Pensions Commission is proposing.

Tags: cent, Labor, saving, Household, Pension, Fidelity Retirement Index, state, Financial services

NAPF: Pensions still seen as most important benefit

Workplace pension schemes are considered the most important benefit an employer can offer and it is expected that their up-take will increase in the future, the National Association of Pension Funds (NAPF) has said.

The Personal Accounts system is expected to be launched in 2012 and the changes in workplace pensions that it will bring about are expected to make them even more popular, according to the organisation.

Mark Brooks, a spokesperson for the NAPF, said: “There is a growing realisation that to enjoy a good standard of living on retirement, there is a need to have an additional pension…it is no surprise [workplace pensions] are still seen as the most important benefit.”

He said that tax advantages and employer contributions are two factors that make work pensions attractive to employees.

A recent survey by NAPF found that almost 49 per cent of respondents said they would feel greater loyalty to their company if a workplace pension was offered.

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Over 9m Brits have no pension provision

Over 9 million Brits have no pension provision yet expect to retire when they reach the age of 62 according to new findings.

Research from Baring Asset Management found that of those adults yet to retire, 24 per cent have no pension provision at all.

The target age of retirement for those between 18 and 34 is 61, in spite of government recommendations stating that it is set to rise to 68 by 2044.

Rob Lay, Barings’ head of European sales, said; “People have to start taking a more proactive approach to planning for their retirement.

“These figures reveal a worrying trend of UK adults assuming that they will be in a position to retire without having made the necessary arrangements for funding that retirement,” he added.

The research also showed that 21 per cent of people expect to be able to retire before 50 with a defined contribution scheme, and 17 per cent expect to be able to retire on a defined benefit.

According to figures from the Government Actuary’s Department, life expectancy for men and women is set to rise to 86 years and 89 years respectively by 2050.

Tags: Pension, funding, Department, personal finance, position, government, Financial services, contribution

Impact of ‘housing slump’ on equity release customers

It is “too early” to predict the impact of the housing market’s current state on equity release customers claims a housing expert.

If house values for equity release customers do decrease, the distance between the amount the estate will eventually owe and the value of the house could be less

“But that’s only if it’s a really long term housing price reduction,” said Anthony Rafferty, head of marketing post retirement for Norwich Union.

He added: “We are a nation talking ourselves into a housing slump by using the word slump.”

The impact of the so-called housing slump has not been felt with equity releases as much as it has with mortgages, according to Mr Rafferty.

The BBC reported that a growing number of consumers are choosing to tap the value of their home through equity release schemes to enhance the funds.

Halifax’s November House Price Index found a 1.1 per cent monthly fall in house prices.

This is the third successive month it has reported falls, with the average UK house price now standing at £194,895.

Tags: equity release, current state, number, word slump."The impact, Business Finance, Pension, equity release customers, housing expert

GFA found to be ‘feasible’

The Thoresen Review of Generic Financial Advice released yesterday has concluded that it is a “feasible” project.

Appointed by the Economic Secretary to the Treasury, Otto Thoresen carried out an examination of the practicality of providing a national platform for generic financial advice.

The investigation found that the benefits of delivery such a service would “outweigh costs by 3.5 to one”.

It also set out the most important qualities for a national GFA service as found in consumer research. These stated that it should be “supportive and informative” as well as “persuasive” without being critical.

Furthermore, it should be “available to all” and “not linked to a product sale” while also be “jargon busting”, advising on debt management, taxation and benefits.

Mr Thoresen said: “Complete impartiality and effective marketing will be critical. But it’s also essential to design a system which will be of genuine benefit to people and which can be sustained over the longer term.

“We are currently running pilot schemes to test out elements of a national system and the findings will enable us to develop the proposals further in the months ahead.”

The review’s final report will be published early next year.

Tags: Otto Thoresen, product, debt, economic secretary, consumer, year, important qualities, Pension

Property alternative investment to pensions

With many assets-rich Britons seeking out alternative investments to their pensions, industry experts yesterday suggested that property could be the way to go.

Current government breakdowns of pensioners’ income suggest that investment income stands at nine per cent.

State benefits stand for 45 per cent, with other types of pensions forming a total of 28 per cent.

The chief executive of the Pensions Advisory Service (PAS) pointed out that investing in property was advisable, because “it’s probably better not to put all [of your] eggs in one basket”.

Malcolm McLean added: “Investing in property instead of a pension is fine, as long as you have the means to do it.

“People often say they wish they had put their money into property rather than a pension, but this isn’t always an option. The rewards in property investment – in people’s minds – seem to outweigh financial rewards from pensions.”

According to latest figures from the Office for National Statistics, total numbers of pensioners in the UK stood at 8.1 million.

Tags: go.Current government breakdowns, Pension, Labor, breakdowns, Financial economics