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New ABI research shows consumer confidence is rising but worries remain about pensions tax relief cuts

Consumer optimism about the economy is improving, according to the latest ABI Quarterly Savings and Protection survey. The survey, of over 3,000 UK adults, was conducted in June 2009.

Dr Rebecca Driver, the ABI's Director of Research and Chief Economist, said:

 

"Despite the downward revision to UK GDP growth for the first quarter of 2009, revealing the largest fall in 50 years, the good news is that, looking forward, the latest ABI survey shows signs of a marked improvement in consumer optimism. 36% of consumers now expect the economic outlook to improve - that's more than double the number last quarter - while those expecting further deterioration has roughly halved. This is underpinned by a reduction in uncertainty about job prospects and increased confidence in the housing market.

 

"However, looking further ahead, there are signs that the imbalance between debt and savings is likely to be exacerbated. Only 20% of people expect to pay off their mortgage debt more quickly, compared to 25% in the previous quarter.

 

"The cut in tax relief on pension contributions in the recent Budget has also made things worse, by increasing uncertainty and reducing confidence in the stability of the UK's pension system. Worryingly, less than 10% know that the cut only applies to those on incomes of over £150,000 and nearly one-third expect pension tax relief to be reduced for those on lower incomes in the future. That is why we have called on all political parties to guarantee no further erosion of the important principle of tax relief on pension contributions - this is vital to improve confidence in UK long-term savings."

 

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Last updated 01/07/2016