In a week were a survey by insurer Royal London found that savings levels have fallen by more than 40%, details of another survey of financial advisers by Axa Sun Life have also been released.
Axa's survey has found that the majority of financial advisers believe the best way to get people to save more was not to increase taxes to give a greater basic state pension but to give better incentives to encourage lower earners to save.
Our view:
Successive governments have offered tax incentives on both Pensions, Peps and Isas until they are "blue in the face" and this has not encouraged the lower paid to save more. Even recently the pilot savings scheme in various boroughs around the country called the "Savings Gateway", where the Government matched pound for pound what lower earners saved i.e 'DOUBLE YOUR MONEY TIME', has had a poor response with new savings accounts opened in the hundreds rather than thousands.
The only way to encourage people to save is better financial awareness education. In addition, to offer some sort of financial advice aid scheme similar to "legal aid" and a tightening, even further, of regulations. This will ensure that sharp practice and misleading brochure information is reduced.
Making products simpler would also help instead of having to wait until you are in your fifties or sixties to access your money, as is the case with pensions. It is also beyond comprehension that you can walk into a supermarket, make one of the biggest investment decisions in your life based on a little promotional brochure whilst weighing up the price of a tin of beans.
For stakeholder pensions you are given a small decision guide called a "decision tree" and this is supposed to help you make those all important decisions. To put this in context, if you needed brain surgery would you be happy with a hospital giving you a five page manual and sending you home with a DIY scalpel kit and some "laughing gas"?
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