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Budget reforms bolster saving habits

New research from the National Association of Pension Funds has found that more than a quarter (28%) of consumers are more likely to start saving or save more into a pension following the reforms announced in the Budget.

By contrast, a very small proportion (3%) indicated they would save less or stop saving entirely.

Younger people were found to be the likeliest (54%) to increase saving following the Chancellor’s announcements in the Budget, and lower income individuals (42%) were also more attracted to pension saving.

A clear majority (61%) of those surveyed indicated that they felt capable of deciding what to do with their pension savings.

Perhaps unsurprisingly most people (58%) adopted a cautious approach, and stated they preferred a regular income for life, rather than exposing themselves to the risk of running out of money in retirement.

Almost a quarter (24%) indicated that they would take all their pension savings in cash, as they possessed other forms of income, and 47% were concerned that their pension would run out, forcing them to become reliant upon the state.

NAPF Chief Executive Joanne Segars said that it was encouraging that research showed more than a quarter of people were likely to boost their saving habits following the Budget.

Segars issued a note of caution, however, and warned that people needed to be made aware of the potential pitfalls of taking all their pension savings in one go.

Only one in seven (14%) said that they did not think they would need any advice, with more than twice as many (29%) preferring face-to-face independent financial advice as to the best way to proceed with their pension savings.

Segars went on to say that greater flexibility also meant greater responsibility, and that although the Government had said people should get free financial advice upon retirement it remains to be seen who will be responsible for such a service.

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