UK - Ninety-five percent of IFAs believe the pension credit is an ‘obstacle' which prevents retirement savings, new research shows.
An online survey conducted by Scottish Life - the pension specialist arm of the Royal London Group - showed almost 1000 of the 1029 respondents believed the means-tested benefits system acted as a ‘disincentive’ to saving.
The research comes as new government research shows 1.7 million people who are entitled to the benefit†have not signed up to receive it.
Scottish Life head of pensions strategy Steve Bee said: “The fact that the vast majority voted in the way they did should be taken seriously by those with the power to make changes to the system.”
Conservative work and pensions spokesman David Willetts says the next Tory government will reduce means-testing and bolster the state pension to encourage greater pension saving.
He told the party’s annual conference: “We can take one million pensioners off the means-test in our first parliament alone. We are not going to abolish pension credit but it will gradually be replaced by the higher state pension.
“We’ll save money on means-tested benefits that pensioners don’t like in order to put more money into the basic state pension which they do.”
However, work and pensions secretary Alan Johnson claimed the pension credit was “taking the fight on poverty even further”.
He added: “It also gets extra money to those who have managed to save something for their retirement and have missed out.”
New figures show 3.17m people are receiving the pension credit and £2bn extra a year is going to pensioners because of it.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.