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Early access to pensions off the agenda

Early access to pensions off the agenda

Category: Pensions

Updated: 19/04/2011
First Published: 19/04/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Pension savers will not be allowed to access their pensions early after the Government said there was limited evidence the move would increase contribution levels.

Having listened to the opinions of those within the pension industry, the Government reached the conclusion that early access to pension savings should not be considered at the present time.

Those who advocate allowing early access to pension money suggest it would encourage people to save more, safe in the knowledge they could lay their hands on the funds of needs be.

However, the Government said the evidence does not exist to support allowing such a move.

The Government added that it wanted to implement the extensive private pension reforms already planned, most notably automatic enrolment from 2012, before it considers further reform.

Recent research from AXA Wealth found that only a third of consumers wanted to access their pension pot early, with a third saying it would encourage them to increase their current retirement savings.

"Consequently, HM Treasury's decision appears to be in line with consumer sentiment," said the firm's head of pensions Mike Morrison.

"However, there is still an overwhelming need for the industry to educate consumers more and ensure they have a range of savings vehicles in their portfolios that allow them to save for the long-term but also have access to money for emergency situations."

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