Pensions - Articles - Are pensions about to become the ready-meal of savings?

 “Ours is increasingly a culture of instant gratification, with little regard for the implications further down the line. And our savings habits are no different. There’s no doubt that more needs to be done to get the UK saving more and make investing an everyday financial decision like any other – including for the long term.
 
 “ISAs and pensions have been the staple of the savings diet for some time. The simplicity of ISAs has done a great deal to encourage short term saving. The ready-meal of the savings world if you like.
 
 “Pensions, while popular, have always had more of an air of mystery about them and despite regular attempts to simplify them, they’re still too complicated and something the wealthier benefit from. The three course dinner of savings.
 
 “However, proposals to make pensions more like ISAs have the potential to do more harm than good.
 
 “While there’s been much discussion on the tax implications, there’s a much more fundamental need to think about the purpose of these products. ISAs are designed for shorter to medium term, flexible and easy to access savings: put as much in as you can afford today, but be reassured it’s there when you need it– for a deposit on a house or new car perhaps. However pensions need to provide an income that lasts for 20, 30 or maybe even 40 years.
 
 “Could and should pensions be simpler? Yes, absolutely. We need to be doing as much as possible to remove the barriers that prevent people from saving and investing – but we also need to make sure people understand the benefits of different products and how they can meet different needs. Be it a quick snack or a three course dinner.”