A recent review shown on the BBC’s breakfast programme suggests that millions of people face a “bleak old age” because they are falling through the cracks of private sector pension provision.
The Workplace Retirement Income commission says 14 million people are not saving into a workplace pension scheme at all and those who are in a scheme, often get charged too much for a service that is complicated and inefficient. The Pensions Minister Steve Webb described the review as “a wake-up call”.
Changes being introduced in 2012 will see workers automatically enrolled into a pension scheme, unless they earn a very low wage or opt out themselves. The review said the Government should consider increasing the minimum amount that is contributed by these workers. It also made the following recommendations:-
- Charges – it claimed were too opaque. It said bigger, lower-cost pension schemes should be able to operated.
- Annuities – it said should be more flexible and suggested people should be directed to an annuity price comparison site.
- Risk – should be mitigated for those in defined contribution schemes, according to the review.
- Cultural change – saving should be encouraged.
- Stability – with a commission set up to oversee long-term pension policy.
Mr Webb said the review gave “a very serious warning and wake-up call” and that “unless people started saving now for their retirement they could find themselves enduring “a pretty meagre existence” in the future.
cba financial services limited broadly welcomed the report. Paul Hegarty, Pensions Specialist said “It has been clear for a long time that people are shying away from contributing to pensions, mostly due to the bad press they have received. Modern pension contracts are low-cost, flexible and available with a risk level to suit the individual.
Many of the historic problems have been eliminated. As chartered financial planners, cba financial services limited is committed to finding the most appropriate solution for all retirement needs. High quality advice from a truly independent financial adviser is essential to ensure retirement is not spent in poverty.”
For more information please call cba financial services on 01482 881919 or visit www.cba-partnership.com
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