‘Gov’t lacks clear vision on saving for retirement’

The National Audit Office’s report on support for retirement incomes said there was not enough interaction between government departments and public bodies involved with pension policy, creating the risk that isolated initiatives to improve long-term saving will be ineffective.

The 50-page review outlined areas of unnecessary overlap between seven government bodies which provided information to the public, as well as mixed messages about pension benefits.

It also found that:

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■ The government has not judged the costs and benefits of policies accurately.

■ Projections for future state spending on pensions may be too optimistic.

■ People need more encouragement and tools to save for retirement.

■ Pension providers should enhance transparency and value for money.

The report stated: “The government cannot be sure it is allocating resources efficiently to those interventions that influence future retirement incomes most cost-effectively because it does not know the relative costs and benefits of different interventions.”

Jeremy Davies, managing director of Warwickshire-based care advisory network Symponia, said: “This report really brings out the government’s smoke-and-mirrors approach to retirement planning, also echoed in its attitude to long-term care.

“Its idea that the typical cost of care in retirement will be £72,000 is really quite frightening, and there aren’t any measures to promote long-term financial planning so people are not thrown into crisis should they need care.”

Adviser view
Allan Maxwell, director of Glasgow-based Corporate Benefits Consulting, said: “The government is providing both incentives and disincentives in terms of retirement savings so the whole system is a shambles. It needs an awful lot more joined-up thinking and simplification. The introduction of the state pension is definitely a step forward but the government should aim for that to be considerably higher, as well as removing requirements for means testing.”