Press Relations: savers

Thursday, May 12, 2011

SAGA: PHASE OUT “PENSION” AND ENCOURAGE SAVERS TO SAVE LIKE NEVER BEFORE.

DR ROS ALTMANN

DIRECTOR-GENERAL, SAGA

PRESS RELEASE

May 12, 2011.

SAGA: PHASE OUT “PENSION” AND ENCOURAGE SAVERS TO SAVE LIKE NEVER BEFORE.

The introduction of a “savers National Lottery” and phasing out the word “pension” from commercial products could re-invigorate long-term savings trends and help head off what seems otherwise to be an almost-certain pensions and care crisis.

Economist Dr Ros Altmann, Director-General of over-50s lifestyle organisation Saga, who is also a former government pensions adviser, says the financial services sector should phase the word “pension” out of all current and future commercial later-life savings products, and start to seriously address decades of mistrust in the whole pensions concept.

“People are wary of saving just at the time when we need savers to save like never before. Long-term saving must be made attractive, possibly even exciting, and certainly be given greater clarity and simplicity. It’s time for savers to have their cake - and eat it,” said Dr Altmann.

“It’s simple. There is not enough money to cover the basic lifestyle aspirations of a population with ever-increasing life expectancy. There is nothing like enough money to cover the cost of care that one-in-three women and one-in-five men will need, and the word ‘pension’ has become so negative that people simply don’t believe there’s any great benefit to be had by paying into one.

“The National Lottery – which probably has more perceived integrity than the personal pension system - yields occasional prize benefits to the lucky few, but with no savings element. Premium Bonds have a savings element but do not accrue interest, so actually lose value.

“But combining the two ideas – winning prizes and accruing interest, having your cake and eating it – is not inconceivable. The more somebody saves, the more likely they are to win, say, a monthly £1 million prize – an evolution of Premium Bonds. The key is legislating such that the investment is ring-fenced and secured in the same way as payments into current personal pension funds, with similarly defined periods before funds could be accessed.”

Ends

Further information:

Iain Macauley

im@pressrelations.co.uk

07788 978800

www.saga.co.uk

Thursday, November 11, 2010

UK PENSIONERS TRAPPED IN “A FINANCIAL CRUSHER”.

ROS ALTMANN

DIRECTOR GENERAL, SAGA

PRESS RELEASE

November 11, 2010.

PENSIONERS TRAPPED IN “A FINANCIAL CRUSHER”.

A two-speed economy – tough for the main body of population, even tougher for over-60s – has devastated older people’s savings and inflated their basic living costs.

Economist Ros Altmann, Director General of Saga, says pensioners are trapped in a financial crusher squeezing them from every angle, and their spending power has been slashed by nearly a third since 2003.

“If you look at the figures of inflation for over-60s they show that since 2003 inflation for pensioners has risen by 30 per cent. The effect of inflation is incredibly damaging for pensioners,” said Ros Altmann.

“Not only are the price rises they face much higher than for the rest of us - because they spend less on consumer goods that have fallen in price and more on basics and insurances where price rises have been much higher - but they have also seen a dramatic fall in their savings income as interest rates have been cut.

“Pensioners have no way of making up for their lost purchasing power. If government benefits are uprated with consumer or retail prices that do not reflect the price rises facing those living on these benefits, then policy will risk leaving more pensioners unable to afford their basic necessities.

“The government had recently announced changing pension uprating to increase in line with CPI (Consumer Prices Index), but this could seriously damage pensioner income over time.

“Pensioners have no other way of making up their income shortfalls as they are stuck on benefits and income from savings. In addition to this, millions of pensioners are living on pension income from annuities which stay fixed each year.

“Even low inflation rates will seriously erode the spending power in just a few years.

“As the Bank of England yesterday admitted that inflation will continue to overshoot its target, we at Saga are warning of the dangers facing millions of older people facing sharp rises in food, fuel and basic living costs that are not properly reflected in official measures.”