Declining pension schemes can have ' damaging economic effects'

25 February 2010

The decline of the UK's pension schemes could have a "damaging effect" on the wider economy of the country.

This is the view of the National Association of Pension Funds (NAPF), which said the "rapid" decline is having an immediate impact as it is not just a problem of the future.

Speaking at the recent NAPF Chairman's dinner, Lindsay Tomlinson, who chairs the organisation, said: "It is actually having very important investment consequences which are immediate and which are likely to be deeply damaging to the UK economy.

"And even worse, although people are not happy about the symptoms that they recognise, no-one seems to see through to the underlying condition, let alone to be taking any mitigating action."

It follows the association's recent call for the government to amend its tax regulation of the pension market to make it a more simple and efficient environment.

Concerns about the current downward trend of pension schemes could lead to a rise in the popularity of policies such as equity release.

Such schemes can add to a pensioner's income with cash taken from the value of their home.