After brave recent announcements regarding State pensions, the Conservatives have promised incentives for people saving for their retirement.
They have proposed an end to 'contracting out' of the State Second Pension, instead with rebates being channelled elsewhere.
One idea is that the Government will match pension savings so that double the amount is being invested. Another comment was that means testing would be abolished and people would not be penalised, as they are now, for saving.
Our View
Whilst the Government matching pension contributions would be highly beneficial, we are unsure how practical this is. 100% return overnight is fabulous but how long can it be sustained and will there be enough redirected rebate to go around?
We definitely agree with scrapping means tested benefits. Why should people who have saved for themselves be penalised and those that have not saved get increased benefits?
We do understand that the lower paid cannot generally afford to save towards retirement and this will have to be tackled in some way. Maybe something of a 'lifestyle' means test, rather than a 'monetary' means test?
Visit the State Pensions Centre in the Pensions Adviser.com.
Registered Users - Get out Free Factsheet on State Second Pensions and Contracting Out.