View more on these topics

Howorth predicts Nest opt-outs of up to 40%

Opt-out rates for Nest could rise to 40 per cent, almost double the forecast of the previous Government, according to outgoing president of the Society of Pension Consultants Duncan Howorth.

A Department for Work and Pensions report in 2008 predicted the opt-out rate will be around 22 per cent but Howorth says many savers have had the option of tax relief on pension contributions before and not saved.

He says early access to retirement savings would make pensions more attractive.

Howorth says: “What we all need to address is how we can encourage more people to save for their retirement. We have obviously got auto-enrolment itself coming. My expectation would be between 30 and 40 per cent will opt out, which is quite high but bear in mind a lot of these people will already have had the option to save in the long term but have not.”

Howorth also suggests that tax-free cash and trivial commutation are better incentives for most people than retaining higher-rate tax relief.
He says: “Tax-free cash always rears it head from time to time. Personally, I think it is more important to preserve that than to preserve higher-rate tax relief.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com