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Pensioners may be £411 better off with new reforms


David Gauke, The Financial Secretary to the Treasury, has said that the new pension reforms will ensure that increases to the basic state pension will not be outstripped by earnings, growth or inflation.

Speaking at the Westminster and City annuities and drawdown conference, Mr Gauke gave an overview of the governments pension review, which included the reduction in means tested benefits, the success of auto enrolment and the increase in private sector saving.

Mr Gauke said that pensioners are now £440 per year better off than they would have been had the state pension only been increased by average earnings since 2011.

28% of workers are now more likely to save into a pension fund following the Governments budget announcements and the introduction of auto enrolment.

Since the introduction of auto enrolment, high numbers of young people and those on lower incomes have begun saving into a pension, according to a survey from the National Association of Pension Funds.

A survey from the National Association of Pension Funds also found that young people and those on lower incomes have had a large increase in savers since the introduction of auto enrolment.

David Gauke said:

"We are putting these reforms in place because we believe they are the right thing to do – that it is fair that people can make their own decisions about their own money. And we also hope that they will initiate a culture change.

"For years, we – and by “we”, I mean both policymakers and industry – have been scratching our heads over people’s lack of engagement with retirement.

“I’m quite clear that a key part of the government’s role is to maintain the conversation with experts from the industry.

"Our reforms will deliver a framework to allow savers the opportunity to make their own decisions – but the pensions and insurance industries are the vital link between the government and savers."

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