LETTER PUBLISHED IN FINANCIAL TIMES, 22 FEBRUARY 2012

Sir

Ian Mulheirn advises the Chancellor to reduce tax-free ISA allowances and pensioner tax benefits. He suggests the money freed up could generate £50bn for infrastructure investment projects over four years, which would offer a growth strategy while cutting the fiscal deficit (20 February). We do not need to penalise savers or pensioners to achieve this though. Surely, it makes more sense to use the billions of pounds already set aside for future retirement income, which is currently languishing in low-interest government bonds. Pension funds are desperate for better returns and the long-term inflation linked return profile of successful infrastructure projects, with some capital upside as well, is ideally suited to pension liabilities. There are funds available already thanks to past pension savings. It would be far better to provide a state underpin to long-term, job-creating projects than to keep printing new money and force government bond yields to ever more over-valued levels. Let's harness the power of pension investments to help stimulate the economy and generate better returns for the future.

 

Yours faithfully,

Dr. Ros Altmann
Director-General
The Saga Group



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