Today (27 May) the Confederation of British Industry has responded to analysis from HM Treasury showing a vote to leave the European Union could negatively impact the UK state pension.
HM Treasury analysis suggested a Brexit would cause inflation to rise, eroding the value of state pension increases, costing pensioners £137 a year.
Those with an additional pension pot worth £60,000 would see its value drop by £1,900, HM Treasury stated.
Rain Newton-Smith, CBI economics director, said all pension schemes benefit when funds can be invested across a stable, growing economy, to best support people in their retirement years.
“Any financial market turmoil caused by a Brexit is likely to have a negative effect on household wealth, the value of funds and damage pensions here at home, especially for those looking to retire within the next few years.
“The sheer weight of credible evidence points towards a serious economic shock if the UK were to leave the EU, meaning a hit to the value of our private pensions, jobs and prosperity.”
Tom McPhail, head of retirement policy at Hargreaves Lansdown, said given the very high levels of uncertainty around the long term economic consequences of a leave vote, it is probably ambitious to attempt a forecast of eventual outcomes.
However he said we do anticipate a period of market instability and volatility in the event of a leave vote, which could have a short term impact on UK pensions.
Mr McPhail said: “For investors faced with making short term decisions therefore, the consequences could be good or bad, depending on your circumstances. For longer term investors, there is probably nothing to be gained by acting in haste.”
He added from a regulatory and legislative perspective, Hargreaves Lansdwon does not anticipate any significant immediate effects of a leave vote.
British business are more worried about auto-enrolment and a potential Brexit than any other issues, a survey by insolvency adviser trade body R3 found earlier this month.
Of the 500 large, medium and small businesses surveyed, 23 per cent listed these two issues among their top concerns.
Earlier this month, following Mark Carney’s warnings over a Brexit vote, the Treasury select committee’s chairman has requested a copy of the Bank of England internal guidelines covering its interventions in the EU referendum debate.
Andrew Tyrie, chairman of the Treasury select committee, wrote to the Bank of England governor to get clarification, demanding a response within 24 hours, according to the letter.
The move followed tense exchanges in a committee meeting on 24 May, with Mr Carney defending his stance on the referendum and accusing one particularly critical MP of trying to “undermine” the Bank of England’s remit.