Savings, Investments and Pensions

 

ABI member companies offer a wide range of medium to long-term savings and investment products including ISAs, Child Trust Funds and a range of pensions. 

 

The ABI works with Government, regulators and other consumer and stakeholder representative bodies to ensure that the regulatory and legislative framework is constantly improved and updated to:

·         provide consumers with the confidence and support they need to manage their money to meet their medium to long term needs; and

·         help provider companies to deliver high value, flexible products and services to meet those needs.

 

As experts in saving, we recognise the importance of regularly putting money aside, whether for a rainy day, saving for a wedding, funding for future university fees, ensuring a comfortable old age by joining an employer’s pension scheme. Whatever the need, there are appropriate savings vehicles to meet that need.

Unfortunately, as a nation, we have got out of the savings habit. Saving for retirement is particularly important. The population, as a whole, can be expected to live longer, healthier, more active lives than previous generations. But, at an individual level, people consistently underestimate how long they will live, what their needs will be in retirement, and how much they need to save to achieve a reasonable standard of living throughout their post-work years. You will get some income in retirement from the Government, but this will not be enough to provide you with a comfortable standard of living, only to cover the very basics.


Pensions are not the only way of saving for retirement, but they offer the most tax efficient option, because the Government gives income tax relief on income saved into a pension. This means, in the simplest terms (although not every scheme or individual pension account will be automatically set up on this basis), that when you pay some of your income into a pension, the income tax that would have been payable on those earnings also goes into your pension savings. In other words, for every £1 you save into a pension, the Government puts some extra in for you too, instead of taking it as income tax. Pensions are specifically designed to provide an income that will last you through retirement, no matter how long you live. This is why money saved into a pension can’t be taken out again until you reach age 55. Most people take their pension saving when they stop full time work. Have a look at the “Retirement Income” page on section of this site for more information on your options.

 

If you have concerns about the impact of the current economic downturn on your pension savings, you can download our publication “people need pensions” from the column on the right of this page. It contains some questions and answers which might be helpful to you.

 There are also a range of pension calculators available to help you work out how much you need to be saving to provide yourself with roughly the level of income you hope to have in retirement