Government rejects early access to pension funds

Wednesday, 20 April 2011 01:02

Proposals to allow Britons early access to pension funds have been rejected in a government consultation on the matter.

HM Treasury has published the official response to a call for evidence on the idea, claiming there is insufficient proof either that early access to pension funds would benefit people in times of hardship, or that it would lead to higher retirement savings overall.

The department adds that the government remains committed to initiatives that encourage Britons to save, urges those doing so to set aside more and will continue to look into enhancing the flexibility of the UK's saving schemes.

Financial services providers LV= and Prudential both responded to the announcement with mixed views.

LV= head of pensions Ray Chinn said he understands the decision, but still perceives the locked-in nature of pensions as a barrier to saving in some instances.

Meanwhile, Prudential head of business development Vince Smith-Hughes argued that "sense has prevailed" during a time when the country's retirement savings should not be subjected to legislative disruption.

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