Allowing early access to funds 'may increase pension saving'
More people could save larger amounts in their pension schemes if they are allowed limited early access to the funds, according to a new study.Research by the Pensions Policy Institute (PPI) found that allowing people to take cash from their pension under special circumstances, for instance to purchase a house or during financial hardship, could prove beneficial to their retirement income.However, the PPI warned that if restrictions are not placed on the withdrawals, their retirement income may suffer.PPI research director Chris Curry mentioned the 401(k) system used in the USA as an example of the system, where only 20 per cent of people use the "early access facility" annually, but both the number of people saving and the amount are increased."If a similar system were introduced in the UK, this could increase aggregate pension savings by around 30 per cent by 2050," he said."However, if people in the UK didn't increase their contributions, or didn't repay their loans, then pension funds could be seven per cent lower."
Share this..
Related stories
Government borrowing undershoots target for the year
Despite the fact that £23.5 billion was borrowed just last month by the government, the highest figure since the end of the second world war, total government borrowing for the fiscal year 2009/10 came in at £163 billion which is less than the £167 billion forecast in last month's budget. So what does the future hold for the UK government and the UK budget deficit? There's no doubt that the...
Read MoreViolence on the streets of Athens
The ongoing fallout from the Greek economic crisis continues to hit the economy with violent clashes between strikers and the authorities today. This comes at a time when the Greek authorities are in deep discussions with the European Union and the International Monetary Fund (IMF) regarding a proposed bailout for the country. The country is literally on the verge of meltdown and unless hard-hi...
Read MoreKing downbeat on 'new SLS'
The replacement for the Special Liquidity Scheme (SLS) will not solve the current problems afflicting the UK mortgage market, the governor of the Bank of England has said.Speaking to the Treasury Select Committee yesterday, Mervyn King added that mortgage firms would continue to face credit crunch-induced revenue concerns.SLS was introduced by the Bank and the government earlier this year, and all...
Read MoreIs the devil in the detail of Gordon Brown's new housing rescue?
As soon as Gordon Brown's new rescue package for homeowners had been announced there were questions being asked about the details of the scheme and who exactly would be able to apply for help. Gordon Brown announced that 8 of the 12 major banks in the UK had already signed up to the scheme, although after being questioned later in the day it appears that many of the banks were slightly surprised b...
Read MoreDo you trust Gordon Brown with the economy?
Over the last couple of years there is no doubt that Gordon Brown has received more than his fair share of criticism with regards to the UK economy and its recent performance. However, the truth is that whether you like Gordon Brown or not he has never wavered from his belief that the UK economy would turn around after injecting billions upon billions of pounds of UK taxpayer's money into the syst...
Read More