UK has the second lowest savings rate of all OECD countries1 with 13 million people in the UK saving inadequately or not saving at all2
Online PR News – 28-May-2010 – – UK has the second lowest savings rate of all OECD countries1 with 13 million people in the UK saving inadequately or not saving at all2
The Association of Independent Financial Advisers (AIFA), working with AEGON UK, the leading life assurance and pensions company, urge the new Government to take steps to rebuild Britain’s savings culture.
In a joint White Paper discussion document published today, entitled ‘Saving Britain’, the organisations outline eight practical measures the new Government could implement quickly, using current technology, infrastructure and legislation, to build a new UK savings culture.
With 13 million people in the UK saving inadequately or not saving at all, and the UK having the second lowest saving rate of all OECD countries, the White Paper argues that building a savings culture is now urgent. Saving can bring financial independence and peace of mind to individuals and families, free up scarce resources for the Exchequer and bring benefits to the economy in terms of more capital for investment. An economy that saves more is better balanced and more resilient in the face of future economic shocks.
To create a new savings culture, AEGON and AIFA have presented eight measures that the Government could take now, including:
Making saving easy by introducing the facility for people to ask for “Save back’ instead of ‘cash back’ - using existing infrastructure to allow people to save at almost any time and at any location.
Build the foundation of a savings culture among school children through introducing school savings clubs and more demanding financial education targets.
Create savings networks within the workplace or other groups such as extended family, friends or those with a common savings goal to reinforce positive attitudes to saving and provide ‘weight watchers-style’ peer support and pressure to save.
Reform regulation to boost the availability of professional and impartial financial advice and information.
The White Paper (http://dms.aegonse.co.uk/download/907a532a6375495fc1631c186a172795) argues many of these proposals can be implemented quickly and will begin to lay the foundations for a sustainable savings culture and calls on the new Government to take decisive action now.
Chris Cummings, director general, AIFA says:
“Given the current economic challenges, we believe it is vital the new Government acts decisively to restore a savings culture in the UK. Individually, and as a nation, we need to rediscover thrift and true prudence. While politicians of all parties agree that saving is a good thing, no one has set out exactly how they would encourage it.
“This White Paper therefore brings fresh thinking to the debate and sets out a policy approach based on how real people think and behave. We must ensure that people have the knowledge and confidence to save for their financial future. Otherwise, as a society, we will all pay a heavy price.”
Francis McGee, head of corporate affairs, AEGON UK adds:
“Previous attempts to boost saving in Britain have focused on very conventional approaches like tax breaks and product regulation. I don’t think these can work on their own. A savings culture is built on attitudes and behaviour. Understanding how people naturally think and interact with one another is the key to a new, inclusive, savings society.
“Simple measures such as developing ‘save back’ facilities alongside existing ‘cash back’, and encouraging savings networks in the work place could create the right environment for people to take some initial steps. Our report outlines some practical proposals the Government can adopt, based on technology that’s already available, and on how people think and behave in today’s world.”
Third Party Endorsements
Professor David Blake, Director of the Pensions Institute, comments:
“The Pensions Institute welcomes the new behavioural approach to restoring a savings culture that is outlined in this White Paper. Only by recognising that people aren’t perfectly rational, and using policy measures which work in tandem with how people actually think and behave, can a positive and sustainable difference to UK savings be achieved.”
For further information:
Chris Cummings Francis McGee
Director General, AIFA Head of Corporate Affairs, AEGON
Tel: 020 7628 1287 Tel: 020 7599 2275
AEGON Press Office
Tel: 0131 549 6798
Mobile: 07740 897527
Notes to editors
1 NIESR, Saving and the National Economy, September 2009, p. 2
The Association of Independent Financial Advisers was launched in September 1999. Its role is to effectively lobby the Treasury, FSA, government, the EU and other opinion formers and policymakers to ensure the regulatory and business environment is positive toward members. It is AIFA’s objective to play a critical but constructive role within the regulation process - offering insights from the "front line" of the market. AIFA is a non-commercial, not-for-profit trade body. It exists solely to bring about a better business environment for its members so they can continue to serve their clients.
In the UK AEGON offers pensions, life insurance, asset management and financial advice to around 2 million customers. AEGON UK has assets under administration of £53.6 billion and employs approximately 4,900 staff.
AEGON is one of the world’s leading insurance groups with approximately 28 thousand employees world wide and 40 million customers in the Americas, Europe and Asia. AEGON's revenue generating assets totalled EUR 388 billion at March 31, 2010.