Conventional pensions can be safer

Mon, 18 Feb 2008

Conventional pensions saving schemes have "safeties built into the system", one expert has said.

Des Hamilton, technical director of The Pensions Advisory Service, explained that with conventional pension schemes a person's savings are "locked away" meaning they cannot access them until they retire .

However, he did warn that "a lot of people" have been encouraged to invest their pensions in what he describes as a direct manner, meaning that the value of their pension is very much dependent on the fortunes of the stock market.

Mr Hamilton explained: "If we have continuing stock market crashes a lot of people will be nervous. If you're close to retirement [and] suddenly it [the market] falls away, you don’t have the ability to wait for it to recover."

According to research conducted by the Office for National Statistics the total income of self administered pension funds stood at £58.5 billion in 2005.
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