Nine in 10 Britons have no confidence in the government’s pensions policy, a recent survey has found, highlighting a sense of uncertainty among savers and a need for more stability. What can be done to give people more confidence in their retirement?

The pandemic has hit many areas of public life, and pensions have been no exception. Consequently, government pensions policy has changed over this time period.

In the government’s 2021 Spring Budget, it was announced that lifetime allowance will be capped at £1,073,100 until 2026. Recent research by retirement adviser My Pensions Expert revealed that one in 10 respondents said this cap has impacted on their retirement strategy.

In the Autumn Budget, the government introduced a new ‘double lock’ system for the next year in an attempt to avoid a bounce-back in earnings as a result of the pandemic. Half of respondents in the survey are opposed to the temporary suspension, a decision that broke a Conservative party manifesto pledge.

Around this time, fears around a cut to pensions tax relief also rose. The research found that half of over-40s are worried that the government will cut pension benefits such as capping the annual allowance or cutting pension tax relief in the coming 12 months. A further 18% claimed that uncertainty surrounding changes to pension tax benefits is negatively impacting their retirement strategy.

Executive chair of My Pension Expert, Andrew Megson, said it is “little wonder that Britons’ confidence in pension policy has plummeted”, with sudden policy changes and rumoured reforms causing uncertainty. “The government has not done enough to protect the interests or financial wellbeing of pension planners,” he said.

Despite this, only 9% of respondents sought online guidance to inform their pension strategies over the past 12 months, while just 12% have engaged with an independent financial adviser.

“Worryingly, too few people are seeking support, with online resources and independent financial advice underused,” said Megson. “Evidently there are barriers to advice, such as assumptions that it is expensive or hard to understand – more education and support must be provided to show that this is not the case.”

Almost half of respondents believe the government needs to dedicate more resources to granting people access to independent financial advice, and almost two-thirds feel that simplifying the pension system would benefit pension planners.

"The government can no longer afford to sit on the fence when it comes to pension policy. Nor can it rely on promoting inadequate free guidance,” said Megson. 

He also called on policymakers to work alongside regulators to develop a “coherent strategy” to improve access to advice: “Only then will savers be able to develop strategies to withstand such changes to policy and restore confidence in their financial futures.”