BUDGET CHANGES MAKING PENSIONS LESS ATTRACTIVE - Accountancy firm PricewaterhouseCoopers has warned that changes in the Finance Act present a real risk that employers and employees will 'disengage' from pensions. One of the big issues is that private sector workers may not be able to afford to retire.
PricewaterhouseCoopers pensions partner Alan Bigley says the company surveyed 300 employers and two thirds of them felt that the Budget changes would make pensions less attractive. Employees are seeing less take home pay and less tax relief on their pensions and Mr Bigley says that the situation is just storing a crisis on top of a crisis. He says that the planned reduction in tax relief to 20% will see fewer people making AVCs. He says this will result in AVCs not making economic sense and so people will try to cut their personal debts instead. The pensions expert warns against a break in people's savings habits and urges the new government to compile a comprehensive policy, which he says is urgently needed.
***
MORNING BRIEFS - The aim of today's G20 meeting in Paris is to address global economic imbalances and not to dictate policy to any particular country, French Finance Minister Christine Lagarde has said. Group of 20 finance ministers and central bank governors are to meet for the first time under the bloc's French presidency today and tomorrow in the French capital, aiming to hammer out common criteria for measuring global economic imbalances.
*** The World Bank has said food prices were at 'dangerous levels' and had pushed 44 million more people into poverty since last June. Food prices began seriously increasing in 2008, sparking food riots in many countries. The IMF says expensive food is an aggravating factor in the unrest in the Middle East. In January, the wholesale cost of food hit its highest monthly figure on record, according to the UN's Food and Agriculture Organisation.
*** Inflation remains a cause of concern for many countries around the world. China and India have already raised interest rates in response and pressure is mounting on the Bank of England to follow suit, with UK inflation double its 2% target. The European Central Bank is not expected to tighten policy until late in the year at the earliest while the Federal Reserve continues to print money to pump prime its economy via a $600 billion bond purchase programme.
*** On the currency markets, the euro is worth $1.3604 and 84.13 pence sterling.
