Public confidence in pensions 'shaken'

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Public confidence in pensions 'shaken'

Tue 13th Apr 2010

Confidence in pensions has been impacted by the closure of defined-benefit schemes and the lack of growth in the equity markets, according to one finance source.

Anna Sofat, director of ADDIDI Wealth, pointed out that equities fell from 2000 to 2002 and again in 2008, which has increased the funding gaps and led to employers having to put in more money.

She disagreed with the notion that the recession has caused a drop in pension contributions and claimed that a much bigger factor has been the falling away of defined-benefit schemes.

"The question is what can industry do to make pensions attractive again – freedom to invest and cheap pension products do attract customers to save for their retirement," remarked Ms Sofat.

Her comments were made following a statement by the Office for National Statistics, which highlighted how the total contributions to private pension schemes between 2007 and 2008 had fallen from £86 billion to £82 billion.

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