UK - Early access to funds in pension schemes could boost retirement income by a third, a Pensions Policy Institute (PPI) report claims.
The report suggested specific circumstances for a saver's early access - through loans or withdrawals - could be used in cases of financial hardship, funding a house purchase or more generally in place of other types of saving or borrowing.
The research funded by B&CE Benefit Schemes and Legal & General highlights existing international schemes which allow early access.
PPI research director Chris Curry said: "The 401(k) system of loans is well established in the US, and evidence suggests that this early access increases the number of people saving and the amount they save, even though only around 20% of people make use of the early access facility."
"If a similar system were introduced in the UK, this could increase aggregate pension savings by around 30% by 2050. However, if people in the UK didn't increase their contributions, or didn't repay their loans, then pension funds could be 7% lower. "
The PPI said it was essential the pros and cons of allowing limited early access were balanced between making pension saving more attractive and discouraging excessive access - which could leave savers with less funds to draw an income from on retirement.
Legal & General wealth policy director Adrian Boulding said: "Our research shows that allowing controlled access to pension fund money would be popular and increase both the breadth and depth of pension coverage in the UK.
"We need bold initiatives like this to re-start pension savings habits after the credit crunch."
This week's edition of Professional Pensions is out now.
Industry Voice: Sponsored by Eaton Vance
BNY Mellon has launched a range of reporting tools to help institutional investor clients track and evaluate portfolio investments based on environmental, social and governance (ESG) issues.
PP speaks to BESTrustees director Heather McGuire about her views on the CMA's review into the investment consultant and fiduciary management markets.