Public distrust of politicians is having a corrosive impact on people’s inclination to save for retirement, according to the findings of a new survey.
The research, from Bestinvest, found that a third of UK adults are discouraged from investing in a pension because they don’t trust politicians and believe they will continue to ‘meddle’ in them.
Politicians were ranked the least trustworthy of nine professions in the survey. In addition, 50% of people asked said they don’t trust any of the main political leaders to support savers and investors.
Respondents also stated that they were put off investing in a pension because rules keep changing and they do not like the fact that their money is locked away until retirement. They added that tax relief on contributions and making pensions easier to understand might encourage them to invest more into a pension.
Jason Hollands, managing director at Bestinvest, said, “Continual reductions in the pension allowance leave the impression the system is in flux. Investors now need to be reassured that the goal posts won’t keep moving. It is time for parties to back off from further interference with the pension and ISA allowance.”
The Autumn Statement last week saw the announcement that that state pension age will increase to 68 in mid-2030s and 69 in late 2040s.
The sustainability of the pension industry has recently been a subject of debate. Prince Charles has recently commented that pension funds have a duty to be sustainable and focus on long-term challenges rather than on short-term profits. This would enable the industry to provide long-term results, he argued.
A recently published Dutch survey suggests that investors want their social and environmental values to be taken into account. Three-quarters of investors stated that they were willing to give up a portion of their pension in order to ensure their investments are ethical.
Pensions minister Steve Webb commented in October that pension funds and investors that already see the long-term risk associated with investing in high-carbon industries have a ‘competitive advantage’. This sentiment was backed up by the Green Light Campaign, which urges action to protect pension saving from climate change.