23rd March 2015
With just some six weeks to go until the general election, political parties still have a long road ahead if they are to convince the electorate that they are a safe pair of hands when it comes to pensions and retirement claims new research.
Despite the onset of the new pension freedoms, the analysis from retirement specialist MGM Advantage revealed that two fifths, at 39% of those aged 55 or over who are not retired do not trust any political party to provide a fair pension system.
This figure rises to 42% among those with a household income under £20,000 and 48% among women.
The survey revealed that trust in the Conservative Party to provide a fair pension system is greater than in Labour, at 29% compared to 16%, and is highest among men, at 33%, and those with household incomes between £60,000 and £100,000, at 48%.
Trust in the Conservative Party was highest in the West Midlands and London at 39% and 38% respectively, and lowest in Yorkshire & the Humber and Northern Ireland with 19% and 10% respectively. Meanwhile trust in Labour was highest in the North East, at 29% and lowest in the South West and Northern Ireland, at 10% and 5% respectively.
The research also shows that people are thinking about taking cash out of their pensions over the 25% tax-free allowance because they are worried about the goal posts moving in the future.
Of the one in 10 people who plan to withdraw cash, 27% cite moving goal posts and the worry they will not be able to access their money in the future as the reason to use the new freedoms now.
Andrew Tully, pensions technical director at MGM Advantage, said: ‘With the new pension reforms coming into effect in just a few weeks and all the political parties talking a good game on pensions to try and attract the ‘grey vote’, this research shows that they may be fighting an uphill battle.
“It is shocking that two in five people approaching retirement, a critical portion of the electorate, do not believe any party will deliver a fair system. Perhaps, despite the reforms providing a welcome increase in freedom and choice, the public are tired of politicians continually meddling in the pensions system and changing the rules of the game.”
Tull added that the overall lack of trust in politicians and constant meddling in pensions is driving some people to consider cashing in their pensions because they do not think the changes will last.
“What we need now is amnesty on policy adjustment. Whoever is in power after 7 May needs to give both the public and the industry time to adjust and put in the hard work that will be required to make the changes a success,” added Tully.
“But the Government will also need to monitor consumer and industry behaviour to ensure that appropriate checks and balances are in place to ensure retirees are getting the best outcomes. It must be about people, not politics.”