Building a savings culture

Photo credit: Images_of_Money (Flickr Creative Commons)

Last month Age UK held a small discussion event with Pensions Minister Ros Altmann, hosted by the think tank Reform. The purpose of the meeting was to have a frank conversation with representatives from the pensions industry, consumer groups and trade unions about the need for more people to save more for their retirements. 

How to persuade people to save money into a pension when they’re trying to manage mortgage payments, childcare bills and the day-to-day costs of life are a huge challenge for all of us.

And the message about the importance of pensions for providing an income in retirement is not helped by some government policy, which for some people can reduce confidence in lifetime saving; the momentous reform of pensions, the so-called ‘freedom and choice’ reforms enable people to have more control over their savings but makes it even more vital that we all fully understand the implications and consequences of our financial decisions and can trust the financial services in which we have invested.

Age UK’s interest in these issues is self-explanatory. We want the millions of current and future pensioners to enjoy a decent income in retirement and be equipped to make well informed decisions about how to make this a reality.

The changes to private pensions, the introduction of the single tier state pension, and the rising state pension age make it harder than ever for people to plan. There have been so many changes. We’ve seen a huge leap in the number of calls to our advice line and requests to local Age UKs from people wanting help.

Age UK’s fundamental priority in this area to ensure that older people on mid and lower incomes get a decent outcome throughout their retirement. Some stability and certainty wouldn’t go amiss either to build confidence in the security of our retirement savings. This is certainly what I need to help me think about my own retirement and how much of my fairly limited savings I choose to put away for some as yet undecided date in the future.

We are pleased that Baroness Altmann is clearly very committed to making a difference as she grapples with the challenge of getting more people to understand the need to save earlier and save more, and this is something we will continue to work with the Government and financial services sector to improve.

Read Age UK’s latest policy briefings on state and private pensions 

Find out about information and advice to help you and your family

 

One response to “Building a savings culture

  1. My cousin is 61, has been in a care home for 18 months as he suffers from Parkinson’s Disease and his life savings are being used up on care home fees. His family home is being let to help towards the cost, but his money will soon run out and the council will then take a charge against his home, so there is nothing for him to bequeath to his family. His care home fees have been increased by 5% this year because the local council only have funds to contribute an increase of .97% for social services funded patients. As a consequence, he, as a private funded resident is being forced to subsidize social service funded residents. If the government wants to “encourage” more people to save towards their retirement, a fairer and more just system needs to be put in place for those potentially having to spend their pension savings on care. The promised cap on care fees has been indefinitely delayed – I would suggest that this is one of the first areas the government needs to justify before asking people to save their money for later life. Who wants to save, only to see their hard earned money going to subsidize strangers rather than leave a legacy to their family?

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