PENSION holders can expect a raft of changes in the year ahead, Express.co.uk speaks exclusively to industry experts from across the financial world analyse the best and the worst of what’s to come for savers in 2018.
With Brexit, downgraded economic growth forecasts and lower than expected manufacturing productivity leading to pessimism for those savers closing in on retirement, the good news is none of these seem to have greatly affected those currently saving.
Chris Knight, CEO of Legal & General Retail Retirement, told Express.co.uk: “Pensions continue to be a heavily debated and topical issue in the UK. However, amidst all the debate there is potentially good news on the horizon for consumers.
Mr Knight says auto-enrolment continues to be a successful venture that brings millions of Britons into workplace pension schemes.
He adds the recent recommendations from the Department for Work and Pensions to include younger generations will only enable more of the working population to save for a better retirement.
However Chris Atkinson at Zurich UK remains concerned that 2018 will see an “increasing divide” between those who are employed, with access to auto-enrolment, and the self-employed, this is bad news for those taking on flexible and part-time work.
One cause for concern is the increased risk being taken within pension portfolios. It is feared with little reward for risk-free investments, any sudden change in the market could reduce pension pots and delay retirement by a number of years.
Final salary pensions are affected by pay increases which have stagnated over the last few years, and there is a real fear that rising inflation will exceed the growth of what is in the pension pot.
On the plight of ordinary British savers and the hideous complexity of pension legislation, data analytics firm, Qlik, has released results of research revealing how 67 per cent of Brits surveyed are dazed by data in their personal and financial lives.
Number one on the firm’s list of UK “data headaches” is pensions with 28 per cent of the vote, followed by banking, politics, news and savings.
But when the firm ran the same research in mainland Europe, pensions did not feature in the top five. Banking came out on top with social media, news, daily spend and politics forming the top five, proving that pension complexity is a purely British phenomena.
Jamie Smith-Thompson, managing director at pensions specialist, Portafina concludes when it comes to UK pensions, it is easy to become emotionally involved in the short-term picture if you concentrate too hard on it.
Mr Smith-Thompson adds markets go up and down on a daily basis and over the long term, as long as your pension is properly managed, these fluctuations will generally balance out and your savings should grow.
He said: “It’s all about being disciplined and focusing on the long-term when it comes to judging your pension investments. And if you are not sure if your pension is being managed with this goal in mind, then it’s never too late to check."