Savers report ‘constant' rule changes as their biggest pension concern

Just under a third (30 per cent) of people have cited 'constant tinkering with rules' as their biggest pension concern, according to a survey from Hargreaves Lansdown.

The survey, which was conducted in January 2022, discovered that whilst investment volatility, potential lifetime allowance breaches and a lack of contributions were all concerns, rule changes were the biggest concern.

A quarter (25 per cent) of those surveyed said investment volatility was their primary worry, while 12 per cent were concerned about lifetime allowance breaches and a further 12 per cent were worried they were not contributing enough.

The survey also revealed that concerns differed depending on how old the respondents were.

Not contributing enough was the key concern of the 30-54 age group, while constant tinkering with rules was the main concern of the older age groups.

Hargreaves Lansdown senior pensions retirement analyst, Helen Morrisey, commented: “Tinkering with rules has been a hallmark of the pension industry in recent years with lifetime and annual allowance thresholds being slashed and then frozen.

“The introduction of tapered and money purchase annual allowance have also thrown a spanner in the works for those on high salaries or who have accessed a pension, as they prevent them from making significant further contributions.

“It’s no surprise that this constant tinkering has got people worried. Pensions are a long-term game and many of these changes have been introduced at short notice and in a piecemeal fashion rather than as part of an overarching strategy.

“It’s understandable that people are wary of what might be around the corner, and this affects their retirement planning.

“Any further changes to pension tax relief needs to be done as part of a wholesale considered review rather than tinkering around the edges and the unintended consequences it brings.

“Investment volatility is also a key concern for people. Sharp market drops such as we saw in early days of the pandemic and more recently with the Russia-Ukraine conflict can be worrying, but it’s worth saying that what goes down does not come back up again and as markets recover so can your pension fund.”

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