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who's kidding who? Workplace pensions will never accrue enough for most people to rely on in retirement. They are costly to set up, time consuming to manage and another rising burden on small businesses. I'm looking at a printout now for one of our clients with 26 staff. The weekly pension sum, both employer and employee is, err..... £24.15.
I don't think we should read into this that the Government doesn't think pensions are important. We have a new government because the last one failed to prepare for the possibility of losing the referendum not because of any downgrading of the importance of pensions.
People don't trust their employers, the Government or the financial services industry on pensions. Ever since Robert Maxwell splashed into the sea successive governments have heaped legislation onto employers schemes resulting in their closure and switch of investment risk onto employees. The removal of the dividend tax credit (which George Osborne promised to restore) further added to employers costs. Responsible savers saw their pensions lost after years of employment and the government did nothing until MPs mailbags filled up so much they had to invent the FAS/PPF.
Fortunately the last government's scrapping of compulsory annuities and the raising of the state pension have gone a little way to restoring confidence in pensions. Unfortunately the appalling communication to those most affected by the changes(such as women approaching 60 who find they have to wait another 7 years for a pension) and the much trumpeted 90% of the PPF (which is much less when indexation is considered) will only serve to undermine confidence in the government on pensions.
Low investment returns(whether real or perceived) and low rates of interest are turning a generation away from saving. Compulsion (aka auto enrolment) is only a response by government to its own regulatory failures and the failure of pension companies to meet their projections.
What is needed is more long term vision, transparency and simplicity.How about a basic state pension of £500 per year for every year of employment with an opportunity to make top up contributions, some flexibility over retirement age, all paid for by ending higher rate tax relief on private schemes?