Disincentives for savings
- Tax-free cash is only limited to 25% in most cases
- Limit on the amount of the individual’s contributions that are eligible for tax relief
- Benefits cannot be taken before the age of 55
- Fewer employers are willing to contribute to pensions on behalf of their employees but auto-enrolment have started to change this attitude.
- Pensions are difficult to understand and people prefer simpler saving methods e.g. ISA
- Charges associated with pensions as well as advice costs are high
- There is a mistrust of pensions due to bad stress and scandals in the past.