UK - Extending National Savings to include a pension bond would help low paid workers boost their retirement income, the House of Lords believes.
Its select committee on economic affairs – set up to scrutinise government policy – put forward the recommendation in its fourth report, Aspects of the Economics of an Ageing Population.
Under the plan, a new arm of the government-backed Nat-ional Savings & Investments would be set up, called National Savings And Pensions. It would offer four simple products: a 10 or 20-year UK FTSE tracker fund, a conventional gilt-edged fund, an index-linked fund and a money market cash deposit fund.
The Committee says these would allow pension savers a cost-effective, reduced-risk investment vehicle that – due to economies of scale – would almost guarantee solid returns.
Liberal Democrat pensions spokesman Lord Oakeshott said: “The strength of the National Savings brand and the economies of scale we would enjoy if we set up the range of funds mean it could offer pension savers a real bargain.
“Total long-term charges at wholesale rates on each fund of no more than 0.5% a year would let the power of compound interest over long periods really work to build up people’s pension savings.”
Committee chairman Lord Peston said: “The only body that can provide a risk-less return in our kind of economy is the government.
“That means that the government, even within a personal savings system, must make available to the system enough real-return fixed bonds, which they can do with ease, through which private pensions can be funded.”
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up
The Pensions Regulator (TPR) has granted Now Pensions a six-week extension for its master trust authorisation application after the 31 March deadline, PP can reveal.