The National Audit Office (NAO) has warned that the government’s attempts to encourage people to save for retirement are not being managed with enough coherence or accountability according to Harris & Co chartered accountants Northampton the specialist small business accountants.
In its report Government Interventions to Support Future Retirement Incomes, the NAO says that while the Treasury leads on overall savings strategy, and DWP on workplace saving, the government has no overarching programme or single accountability for encouraging people to save for retirement.
As a result, the NAO believes there is a risk that individual, but co-dependent interventions may not be effective in increasing personal saving for retirement and reducing the liability of the state for supporting people. Spending on the state pension and pensioner benefits increased from 5.5% of GDP in 1990 to 6.9% in 2011-12.
The watchdog says it is not convinced that the government’s initiatives to manage this problem have overcome all the challenges. While the government has broken down some of the barriers to a longer working life by abolishing the default retirement age, NAO says it does not have a formal published strategy to influence employers. NAO is also concerned about how many employees will stay in automatic enrolment for pension schemes.
Amyas Morse, head of the NAO, said: ‘What is needed is for the government to take a more holistic view of its portfolio of interventions, how they interact and their relative costs and benefits. It should be more active and effective in influencing citizens to save more and plan more effectively for retirement, and in seeking to change the negative attitudes of some employers towards older workers.’