Lack of commitment towards providing appropriate financial products for lower and moderate income earners is ripe for debate according to employee benefits provider BC&E.
Commenting following the Treasury Select Committee report on Restoring confidence in long-term savings, BC&E has outlined a number of solutions designed to encourage saving.
Solutions focus on simplicity, tax, flexibility, workplace marketing and pensions credit. Simpler savings products would encourage more people to save, argues BC&E with decision trees and key features documents often putting people off.
Easier to understand tax breaks on pensions, such as 30% for everyone would also encourage saving. Some controlled access to pension pots in ill health or long-term unemployment situations may encourage younger people to start up a pension.
BC&E emphasises the importance of marketing pensions scheme benefits in the workplace, especially to lower and middle income earners.
Finally, the provider is encouraged the Select Committee has taken on board its concerns about tax credit. BC&E argues lower to middle income earners change from standard rate tax workers to higher rate pensioners. Only those with pension income of £60,000 to £90,000 would avoid being hit by the pensions credit.
"It is our belief pensions credit has a negative effect on many ordinary people's willingness to save for themselves," said John Jory, deputy chief executive of B&CE Benefit Schemes.IFAonline
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