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NAPF supports call for QE probe

The National Association of Pension Funds has backed a Treasury select committee report calling on the Bank of England to explain the impact of quantitative easing on pensions.

A report published by the TSC last week urges bank officials to provide an estimate of the overall benefit and loss to pensioners and savers as a result of QE.

The report says: “Loose monetary policy through quantitative easing and low interest rates has redistributional effects, particularly penalising savers, those with drawdown pensions and those retiring now. The Bank of England has argued that some of those effects may be mitigated by the increase in asset prices stimulated by easing.

“While the aggregate of savers and pensioners may have received some benefit from higher asset prices, there will be many individuals who will not have benefited. The bank should provide its estimate of the overall benefit and loss to pensioners and savers from easing.”

National Association of Pension Funds chief executive Joanne Segars says: “The latest cycle of QE has hit businesses with final-salary pensions for £90bn, which is cash that could go into jobs and investment instead.

“People who are about to retire who are hunting for a good annuity will get a much worse deal than they did a few years ago. QE is leaving them out of pocket for the rest of their lives.

“We want to see a stronger economy and understand the case for this monetary policy but the bank should do more to explain its impact on pensioners and savers.”

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Neptune video: UK economy: a sustainable recovery?

After years of a slowly brewing economic recovery, the UK has seen a strong rise in growth in recent months. Mark Martin, manager of the Neptune UK Mid Cap Fund, discusses the strength of this recovery and whether it is sustainable.

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