Early pension access could promote savings

Giving people the chance to dip into their pensions before they retire could boost savings, it has been suggested.

A report from the Pensions Policy Institute has argued that offering savers limited opportunities to gain early access to their pensions could help them get through tough financial times.

The report claimed that such a move could see the number of savers grow by a third by 2050.

However, the plan came with a warning that in some cases pension contributions may need to rise.

There would also need to be a strict ceiling on the amounts that people could take out of their pension funds and detailed schedules for any repayments.

Chris Curry, the PPI’s research director, said that the introduction of such schemes in the US had seen an increase in the number of savers despite the fact that only one in five of people had chosen to use their pension funds before retiring.

Mr Curry added: “There are many different possible ways of allowing early access to savings within pension funds, and some are already in use internationally.”