Royal London Asset Management believe that the Pensions Commission have ignored the rising debt of students, which will leave thousands unable to save for retirement, warning that the Turner report fails to take into account the financial difficulty of people who leave university. In his report, Turner suggests that anyone with considerable debts should opt out of the National Pensions Saving Scheme (NPSS) to consolidate their debts.
According to Barclays, students leave university with an average of £12,069 of debt. This is expected to rise to £33,000 by 2010. Graduates could lose 13 years worth of savings if they opt out of the NPSS. Turner suggests that a maximum contribution each year of 16% of salary would be £3,000 on the national wage.
Our view
A valid point. Increasing debt overall will leave more and more less able to save. The Government needs to massively control debt and lending but it ignores it just to keep the economy moving.