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Early access could boost pension saving, says PPI

The amount of money being saved into UK pension funds could jump by 30 per cent if people were allowed to dip into their funds in an emergency, according to the Pensions Policy Institute.

Research funded by B&CE Benefit Schemes and Legal & General found that the people saving the least for retirement – women, low earners and young people – would be more inclined to put money away if they could access it in times of financial hardship.

But the report warns that if withdrawals are allowed without restrictions Britain’s pension provision could reduce by 7 per cent.

It proposes a number of ways of allowing access to savings such as the loans and withdrawals model used in the US which permits people to take loans from their own pension fund which they must pay back with interest.

PPI research director Chris Curry says: “The loans system is well established in the US and evidence suggests this early access increases both the number of people saving and the amount they save, even though only around 20 per cent of people make use of the early access facility each year. If a similar system were introduced in the UK, this could increase aggregate pension savings by around 30 per cent by 2050. However, if people in the UK did not increase their contributions, or did not repay their loans, then pension funds could be 7 per cent lower.“

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Apple recently announced the highest-ever recorded quarterly net profit ($18bn), with the sale of 74.4 million iPhones helping the company deliver $74.6bn of revenue for the quarter ending December 2014. These sales were largely driven by strong demand for the new iPhone 6 and iPhone 6 Plus. Highlights included Chinese iPhone sales doubling year-on-year and unit growth of 44% in the US — supposedly a well-penetrated market. Apple ended the quarter with $178bn in cash on its balance sheet, having generated a staggering $30bn in free cash flow during the quarter.

At Neptune, we have been long-term believers in the Apple story, and continue to hold the stock in a number of our portfolios based on the company’s long-term growth prospects. This is predicated on our belief that Apple has proved thus far that it can — unusually for a consumer electronics company — maintain high margins for a sustained period of time, even as adoption of new technology slows down and competitors produce similar-specification products.

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