The increased uptake means that almost 1 million (927,675) people in the UK will save more into their pensions, leading to a population better equipped to deal with the mounting cost of living in retirement.
Of those DC savers intending to save more as a result of this change:
- Over half (55%) plan to save as much as 5% more into their pension each month
- A quarter (25%) will put 10% more in
- 5% will add 20% or more
The change will encourage people to invest more of their money into their pensions. While just over a third (36%) said they would increase contributions from their monthly salary, 16% said they would dip into their savings account and 14% said that they would turn to their bank account.
DC savers clearly see their pension as a family asset – designed to meet the needs of their family once they are gone. The majority (81%) of DC savers approaching retirement say their pension is for ‘me and my family’ and almost half (43%) disagree with the statement ‘my pension is for me alone’.
Simon Smallcombe, UK Managing Director, AXA Life Invest said:
“Our research shows that people will welcome Osborne’s decision to scrap the death tax at the punitive rate of 55 per cent. UK savers see their pension as money for their family and loved ones – not just themselves. A significant proportion plan to save more each month, with some planning to boost their pots by 10% every single month.
“The industry must acknowledge that people see their pension as an asset for their entire family. We must abandon our traditional thinking that a pension is just for the individual and stop penalising customers for wanting to share their pension security with their partner in life.
“People want the comfort of knowing their pension fund will go to their loved ones when they die. That’s why our Secure Advantage+ Pension Plan allows the policyholder to choose who their fund should go to after their death, giving savers the knowledge that their loved ones will be well looked after no matter what happens.”
