Government's credit crunch response "dreadful for pensions"

www.moneynews.co.uk > Pensions > Government's credit crunch response "dreadful for pensions"

Government's credit crunch response "dreadful for pensions"

Wed 8th Oct 2008

The government's reaction to the credit crunch has had a bad effect on pensions, an independent policy adviser has said.
Dr Ros Altmann called it a "knee-jerk panic reaction".
She said it is now safer to put money in a bank than in a pension or other long-term investment, as there is now a 100 per cent guarantee for it.
In contrast, the Financial Services Compensation Scheme and Pension Protection Fund cover only around 90 per cent to a limited amount.
Dr Altmann said that nearly all private pensions are invested in shares and will have lost value.
She called on the government to provide more long-dated and mortality/longevity gilts.
This, she explained, would improve annuity rates, bring in a cheap source of funding and help pensions.
Gilts are the simplest form of government bond.
According to the UK Debt Management Office, gilts constitute the largest share of liabilities in the government's portfolio.
There are essentially two different types of gilt available: conventional and index-linked.

Related News : Pensions
	Over-55s don't believe in paying for care, reveals Aviva
	East Midlands comes top in pension contributions
	Corporate pensions provider issues advice for businesses
	One third of workers have no pension, claims Prudential
	More than a third of Brits fail to reassess pension risk, claim experts
	Women protest at No 10 over proposed pension reforms
	Retirement age 'to be brought forward by ten years'
	Interest rates held at 0.5 per cent by Bank of England
	Pension contributions fall in recession, ONS reveals
	Equity release for retirement 'might not suite every household'