Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • April 2012
04

IoD figures reveal 'crisis of confidence' in pensions

Open-access content Friday 20th April 2012 — updated 5.13pm, Wednesday 29th April 2020

Figures showing pension saving declining at the same time as the amount paid into ISAs increases point towards a ‘crisis of confidence’ in the UK pension system, Saga said today.

2

Research published by the Institute of Directors today reveals that the amount paid into ISAs rose from £35.7bn in 2007 to £43.9bn. Over the same period, employee and individual pension contributions fell from £25.6bn to £22.9bn. Payments into ISAs jumped further, to £53.8bn, in 2010/11.

Saga's director general, Dr Ros Altmann, said: 'There's seems to be a crisis of confidence in our pension system. People are no longer willing to just put their hard-earned money into a 'locked box' where that money is taken away from them and they cannot access it for potentially a very long time.

'If Government wants to ensure people save for later life, auto enrolment needs to focus on encouraging long term savings in general, rather than just pensions in particular.

'Ideally, auto-enrolment should encompass either pensions or ISAs, which could allow workers to access their own contribution if they need to, while leaving the employers money and tax relief locked in for the long term,' she added.

The IoD's report, published in association with Lucida, recommends the state pension age be raised to 70 sooner than is currently planned. It also advocates a single, flat-rate universal basic state pension and abolition of means-tested retirement income benefits.

Government should also radically reform and simplify the 'complex, unattractive' and heavy-on-regulation pension architecture, it said, as well as developing a formal savings policy to address the danger of over-indebtedness.

The report's author, IoD senior adviser on pensions policy, said: 'Traditional pensions are now outdated and increasingly unattractive. Society has changed but pension provision and Government policy have failed to keep up with the new challenge we face.

He added: 'We cannot go on like this, and if nothing is done then people will continue to walk away from pension saving.'

Dr Altmann said it was time for 'new thinking' on pensions. 'If auto-enrolment is to achieve its aims, we will have to ensure people can access their own money if they really need it.

'At the moment, when it comes to encouraging long-term saving, policy says its pensions or nothing, which will unfortunately leave too many people with nothing.'

This article appeared in our April 2012 issue of The Actuary.
Click here to view this issue
Filed in
04
Topics
Health care

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Deputy Head of Capital Modelling

London (Central)
£110000 - £130000 per annum
Reference
144789

Head of Analytics (Actuarial)

London (Central)
£130000 - £165000 per annum
Reference
144788

Pensions Actuarial Analyst - GMP Equalisation

London (Central)
£ dependent upon experience
Reference
143745
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ