Savers in their forties and fifties are being “misled” over the safety of their final salary pensions and could suffer a 10 per cent cut to their retirement incomes, a senior official has warned.
In a stark warning, the head of the government’s pensions lifeboat said five in six final salary schemes had fallen into the red and faced a struggle to pay savers a full pension.
Alan Rubenstein, chief executive of the Pensions Protection Fund (PPF), said that many of the 11 million people with a supposedly guaranteed, inflation-linked pension were being led to believe their pension was safe, when “for many that isn’t the case”.
Savers who tried to cash in their final salary pots early, by using the new pension freedoms due in April, face losing up to 40 per cent of the value of the pension they’ve built up, he said.
The comments, in an interview with The Telegraph, represented the most overt warning from a government-backed organsiation since the crisis in the early 2000s when thousands of workers faced the loss of their pensions as companies collapsed with deficits in their schemes….
In addition, Labour is trying to make itself universally unpopular;
More money could be saved by lowering the £40,000 ceiling on the amount savers can put aside each year tax-free or cutting the lifetime tax-free limit of £1.25million per pension, The Times reported last night.