Credit crunch could hit unconventional pension savings

Fri, 15 Feb 2008

Anyone who has not been saving through a conventional pension scheme may find that what they had saved "falls away" if there is a continuation of the credit crunch, one expert warns.

Des Hamilton, technical director of The Pensions Advisory Service (TPAS) explained that if property prices fall significantly then those who had been planning on living off the equity in their home or a buy-to-let property they owned could be hit in the pocket.

He said: "A lot of [younger people] have been going into the buy-to-let market and again, reductions in the value of property could leave a lot of those people very exposed."

Mr Hamilton also expressed worries that the credit crunch could put people off saving for a pension as adverse economic conditions tended to dissuade savers.

Research conducted by the Office of National Statistics found the total income of self-administered pension funds rose to £58.5 billion in 2005. In the same period expenditure on the funds totalled £42.4 billion, it said.
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