Savings Shortfall ‘Remains Crucial Problem’
Keywords: savings, pension, tax, relief, loans, finance
Older people are losing out on billions of pounds every year, a new study reveals.
In research carried out by Unbiased, up to 2 billion pounds in pension credits are to remain unclaimed over the course of this year. With between 20 and 25 per cent of pensioners failing to take out their entitlement, which guarantees them a weekly income of at least 119 pounds and 5p, those consumers who are missing could be set to develop unnecessary pressure on their day-to-day finances.
David Elms, chief executive of Unbiased, said: “Our lack of saving for retirement remains a crucial problem for the UK and those that are in a position to save more should be doing so. However, it seems that people are compounding the situation - be it through apathy or confusion - by failing to claim vital sources of retirement income in the form of tax credits”.
Findings from the firm also revealed that those people currently in work are missing out “on huge sums” by not putting their money in competitive savings accounts. According to the firm, high-rate taxpayers are paying an extra 739 million pounds in unnecessary tax by failing to make additional voluntary contributions - which allow consumers to make “top up” payments from their salary, which in turn leads to a larger pension fund at the time they wish to retire. “No one likes paying more tax than is necessary and no one likes missing out on something that is rightfully theirs, so we are urging people to either kick-start their pension and tax planning or review their current situation with urgency. A discussion with a local independent financial adviser is a great place to start this process”, he added.
Meanwhile, a MoneyMood Survey carried out by Legal & General earlier this year indicated an increasing desire among Britons to save money. After paying off bills and servicing credit cards, personal loans and other forms of debt, just less than two-thirds (62 per cent) of consumers at the end of May were in the mood to put cash away. This is in comparison to 57 per cent in July 2005.
Julia Clayworth, wealth management customer marketing manager for the financial services provider, said: “This suggests more households are finding themselves in a position where they can afford to save rather than struggling to make ends meet”. She also suggested that the surging desire to put money aside was due to recent interest rate rises by the Bank of England’s monetary policy committee curbing consumers’ finances. The Bank’s increases are having the “desired effect - more saving less spending”.
In an earlier Unbiased study, Britons were reported to have borrowed some 41p for every pound they saved over the first quarter of 2007 - a rise from the 35p noted at the end of last year. Mr Elms reported that despite a “conscientious effort” being put into saving, such hard work is being unraveled by “continued increasing usage of credit cards, loans and overdrafts”.
Tom Dawson writes for Essentially Home Loans where visitors can apply for secured loans online, we also specialise in bad credit loans for UK residents. Visit Today: news.essentiallyhomeloans.co.uk
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