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Osborne: a third of savers will take their money out of pensions

Osborne: a third of savers will take their money out of pensions

George Osborne estimates a third of savers are expected to take their money out of pensions under liberalisation.

Appearing before the Treasury Select Committee, Osborne was asked about a letter he recently sent to the Financial Conduct Authority’s chair about information concerning pension reforms.

Asked about estimates that over 33% of people would take their money out of pensions, he said: 'it's a reasonable costing estimate.'

Osborne was then asked if he was encouraging savers to take money out of their pensions.

'A pension is an attractive product you can invest in if you'd like, but I have made the use of that pension pot more flexible, which could make it more attractive,' he said.

He added: 'But it's a new area of policy, so it's uncertain.'

The saving rates fell to 4.9% in 2014, and is anticipated to fall to 3.2% by 2015-2016. The chancellor said his priority was to 'incentivise saving', but acknowledged changes would not happen overnight.

'We, as an economy need to save more. The measures I have set out [in the Budget] incentivise savings and reward savers, but it can't happen overnight.'

'It is not a quick fix job, you have to turn around a supertanker,' he added.

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