EASY ACCESS PENSIONS
TAKE A LOAN FROM YOUR PENSIONIn the US, people can borrow up to 50 per cent of their pension, known as a 401k. The loan must be paid back, or else there are tax penalties.
Read more: Women must face up to the horror of old age poverty This could be widespread in the UK one day. “In future there will be far more reliance on people’s own savings and they will have to save more. But to ask people to lock up money without any access to it is increasingly unrealistic,” says Richard Parkin of Fidelity Worldwide Investment. Lawson says the experience in the US shows younger generations are more prone to take a loan from their pension. Those who take loans are also more likely to take a second one. The upshot of allowing savers to borrow from their pension may be that more people are encouraged to pay into one. But the loan side of the pension would have to be subject to strict limits and penalties, to avoid people sapping all their savings. “While loans are very popular they are not necessarily good for the consumer,” Parkin adds. Read more: It's called the feminisation of poverty – women are more at risk