Warning shot ahead of Autumn Statement as new research shows politicians are deterring the public from saving

26 November 2013


    • Politicians ranked the least trustworthy of nine professions including bankers, estate agents and car salesmen

    • Half of UK adults do not trust any of the main political leaders to support savers and investors


    • Distrust over politicians meddling with the pension system is cited as the biggest deterrent to investing in them


  • Labour has pledged to reduce pension tax reliefs, the Lib Dems to cut the lifetime pension allowance further, while media reports suggest a reduction in the amount that can be withdrawn as a tax free pension lump sum and a cap on ISAs are under consideration

New research published by leading private client investment adviser Bestinvest has revealed that politicians are considered to be the least trustworthy of nine professions, ranking below car salesman, estate agents, the media and banks.

The research indicated that public distrust in politicians is having a corrosive impact on people’s propensity to save for their retirement, despite the fact that most people are not making adequate provision. A third (34%) of UK adults surveyed say they are discouraged from investing into a pension because they don’t trust politicians and believe they will continue to ‘meddle’ with them. The second most discouraging factor was that the ‘rules’ on pensions keep changing (31%).

The survey of 2,000 UK adults also revealed that 50% of people do not trust any of the main politicial leaders to support savers and investors. Of those who did believe a political leader to be supportive of savers and investors, David Cameron scored highest (20%) ahead of Ed Miliband (15%), Nigel Farage (8%), Nick Clegg (5%) and Alex Salmond (2%).

For respondents living in Scotland, 24% of adults cited Alex Salmond of the SNP as the leader who would be the most supportive of Scottish savers and investors, followed by Ed Miliband (13%) and David Cameron (11%). 48% of people in Scotland believed none of the politicians to be supportive.

The research comes ahead of Chancellor George Osborne’s Autumn Statement on 5 December which last year saw deep cuts announced in the amount that can be saved into pensions both annually and over a lifetime. Yet despite these reductions which take effect in 2014, the Liberal Democrats have already pledged to introduce a further 20% cut in the lifetime pension allowance and Labour’s Shadow Chancellor Ed Balls has proposed a reduction in the amount of tax relief that higher earners can received on pension contributions. The research published by Bestinvest has revealed that tax relief on pension contributions is the most common motivation to continue or begin to invest into a pension (36%).

According to recent media reports, the Government is mulling a potential reduction in the amount that can be withdrawn as a tax free lump sum from a pension on retirement, currently up to 25% of the value. Such a move could be deeply unpopular as the research reveals that another major reason deterring pension investment, cited by 23% of respondents, is that they want access to their money and do not like the idea of having their money locked up until retirement.

Individual Savings Accounts have become an increasingly popular alternative way to save for retirement instead of a pension, which may be partially due to the ability to access the capital at any time. Yet it is believed the Government has also been considering the introduction of a cap on the lifetime amount that can be invested in ISAs, possibly at £100,000.

Jason Hollands, Managing Director at Bestinvest, said: “With the Autumn Statement around the corner, politicians of all parties should take heed that their repeated calls to meddle with long-term investment allowances is having a deeply debilitating impact on people’s willingness to save. The urge to fiddle with the pension allowance has become an addiction among the political parties. Any pincer movement against ISAs would likely have a toxic impact both on public confidence in saving and investing but also on the electorate’s already withering assessment of the trustworthiness of politicians.

“Continual reductions in the pension allowance leave the impression the system is in flux. Investors now need to be reassured that the goal posts won’t keep moving. It is time for the parties to back off from further interference with the pension and ISA allowances.”

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* Research conducted online by Research Plus, 14th – 18th November 2013 among 2,000 adults aged 18 years or over.

Q. Which of the following would / does discourage you from investing into a pension? Please select all that apply.

I don't trust politicians - I think they will meddle with them 34
The 'rules' concerning pensions keep changing 31
I want access to my money and don't like the fact my money is locked away until retirement 23
I find pensions are too complicated and I don't understand exactly how they work 20
I am not discouraged from investing in a pension 33

Q. Which of the following would / does encourage you to invest more into a pension? Please select all that apply.

Tax relief on contributions 36
If politicians didn’t keep meddling with them 31
If the ‘rules’ concerning pensions didn’t keep changing 31
If pensions were a lot easier to understand and I knew exactly how they work 28
The ability to withdraw a tax free cash lump sum at retirement (up to 25% of the fund) 25
Evidence that the State Pension will not be enough for a reasonable standard of living 20
If I could access my money before retirement 18
None of these are reasons that encourage me to invest in a pension 22

Q. Which one of the following political leaders do you believe is most supportive towards savers and investors in the UK /Scotland (in Scotland only), irrespective of how you vote in an election [all UK responses - including respondents in Scotland]

David Cameron - Conservative 20
Ed Miliband - Labour 15
Nigel Farage - UKIP 8
Nick Clegg - Liberal Democrat 5
Alex Salmond – SNP (only shown in Scotland) 2
None of these 50

Q. Which one of the following political leaders do you believe is most supportive towards savers and investors in Scotland, irrespective of how you vote in an election [Responses from respondents in Scotland only]

David Cameron - Conservative 11
Ed Miliband - Labour 13
Nigel Farage - UKIP 1
Nick Clegg - Liberal Democrat 3
Alex Salmond – SNP (only shown in Scotland) 24
None 48

Q. Please rank the following from 1 to 9 in the order that you trust them, with 1 being the most trusted and 9 being the least trusted:

  Average score
Doctors 1.8
Police 3.1
Tradesmen (Builders, Plumbers, Electricians) 4.5
Financial Service Industry 5.0
Banks 5.1
The Media 5.9
Estate Agents 6.1
Car Salesmen 6.5
Politicians 7.2

About Bestinvest:
Founded in 1986, Bestinvest has grown to become a leading private client investment adviser, looking after £5 billion of assets for more than 50,000 clients. We offer a range of investment services from Select for self-directed investors to Investment Advisory and Investment Management services for clients who do not have the time or inclination to manage their own investments.

All of our services are underpinned by rigorous research aimed at identifying those fund managers we believe will deliver long-term superior performance. We also have a team of expert financial planners with nationwide coverage to help clients with their pensions, retirement or Inheritance Tax
planning. At Bestinvest, we pride ourselves on offering the highest levels of professionalism and expertise with transparent, competitive prices. We are pleased that our greatest source of new business is from personal referrals from existing clients.

Bestinvest has won numerous awards including UK Wealth Manager of the Year 2013, Best Wealth Manager for Investments 2013, Best Stockbroker for Customer Service 2012 and 2011 Self Select ISA Provider of the Year as voted by readers of the Investors Chronicle and the Financial Times.

Bestinvest’s Select service was recently ranked as the highest-scoring investment platform when judged on cost, service, range of features and breadth of investment choice by specialist consultancy The Platforum.

Headquartered in Mayfair, London, Bestinvest employs more than 200 staff and has an extensive network of regional offices. For further information, please visit: www.bestinvest.co.uk

About Tilney

Tilney is a leading investment and financial planning group that builds on a heritage of more than 180 years.  Our clients are private investors, charities and professional intermediaries who trust us with over £23 billion of their assets. We offer a range of services including financial planning, investment management and advice and, through our Bestinvest service, a leading online platform for those who prefer to manage their own investments.

We have won numerous awards. Tilney has been awarded Best Conventional Advisory Service at the 2018 City of London Wealth Management Awards, Best Advisory Service in the 2015 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. Bestinvest was voted Best SIPP Provider and Best Fund Platform at the 2017 City of London Wealth Management Awards, Best Direct SIPP Provider at the YourMoney.com Awards 2017, Best Stocks & Shares ISA Provider at the 2017 Shares Awards, as well as Best Self Select ISA Provider, Best Online/Execution-only Stockbroker and Best Investment Platform 2017 at the FT and Investors Chronicle Investment and Wealth Management Awards, as voted by readers of the FT and Investors Chronicle.

Headquartered in Mayfair, London, the Tilney Group employs over 1,000 staff across our network of 30 offices, enabling us to support clients with a local service throughout the UK.