Consumers saving again
New figures from the Association of British Insurers (ABI) suggest a positive future for long term savings.
Politicians from all parties have been concerned about the decrease in the number of people saving for retirement.
Changing work patterns and the fall in the stock market have seen employers moving away from providing occupational and final salary pensions. Stakeholder pensions are yet to pick up the slack, and analysts have warned that many people face an uncomfortable old age unless they begin to save.
The figures from the ABI show that whilst sales in individual stakeholder pensions have continue to fall, regular premiums to individual pensions show the first rise since the middle of 2002.
Personal pensions and employer-sponsored stakeholders have increased by six per cent, which represents a £28 million rise since the first quarter of 2003.
The head of life and pensions at ABI, Chris Kenny, said this “showed a positive change in people’s attitudes towards pensions and savings”.
Mr Kenny added: “Single premium life insurance is showing an 18 per cent increase since this time last year. That’s a real cause for optimism as people are once again returning to the savings market.”
But he went on to say that the level of change was not consistent across all sectors, and so more action was needed to “consolidate and develop these encouraging trends.”
“Recent ABI research showed a positive change in people’s attitudes towards pensions and savings, and today’s new business figures show that trend beginning to have a commercial impact.”
“The ABI has long highlighted the important role employers play in raising people’s awareness of the savings gap – and getting them to do something about it. Today’s figures confirm the importance of that role.”
“To build on this the Government need to help employers, provide greater incentives and maximise the opportunities that are just waiting to be exploited” he concluded.
The Treasury is currently engaged in an on going review of the current pensions legislation, including the tax breaks available, and is looking at ways of ensuring increased employer and employee contributions.
