Friends Life, the new group that brings together the UK business of Friends Provident and part of AXA’s UK life and pensions business, welcomes Pension Minister Steve Webb’s plans to create a flat-rate £140-a-week state pension.
The new model provider believes this move could encourage swathes of savers to start setting money aside for retirement, safe in the knowledge their savings will be preserved in future years. Friends Life also believes today’s news will improve simplicity by removing much of the confusion surrounding pension entitlement and offer an easier to understands system for people to get their heads around.
Martin Palmer, head of corporate pensions Friends Life, commented:
“With auto enrolment just around the corner, the timing of today’s announcement is ideal. For far too long now complexity has clouded pension and retirement planning in this country but today’s announcement should go a long way towards removing this. Our research shows a growing trend for savers in the UK to take responsibility for funding their own financial future, and today’s clarification of what individuals might expect from the state come retirement should help them achieve this.”
Friends Life warns however that unless the government avoids the temptation to tinker further with legislation governing state pension provision in the UK, the full potential of today’s announcement would not be realised.
Martin Palmer continued:
“Today’s news is a welcome step towards to simplicity for pensions. But now that we have a nice sensible plan on the table, government must resist the urge to continually tinker with it. Realistically the state pension age will have to be reviewed based on longevity, but any alteration must be sounded well in advance to allow people to plan effectively for their retirement.”
Source : Friends Life press Release
