The UK needs to save more, and business needs more investment. While there are signs that this investment is picking up, despite a rock bottom rate of interest, it remains only marginally better than anaemic. But at least, savers seemed to be returning. Legal & General said yesterday that in 2005 no less than £24bn was invested in its saving schemes, the highest figure ever.
The newly appointed chief executive, Tim Breedon said: “The growth in asset accumulation has been quite extraordinary… What’s been driving it? Investor confidence to some extent, the debate around long-term savings generally and a slight loss of confidence in housing as a store of value and future wealth.”
Meanwhile, Mr Breedon also spouted forth with his take on Lord Turner’s pension ideas yesterday. You may recall that the report proposed that the administration of the National Pensions Savings Scheme (NPSS) should cost no more than 0.3%. Yesterday, Mr Breedon, who claims that L&G could administer the scheme more cheaply than anyone said: “I don’t think anybody can run the scheme for 0.3 per cent…The 0.3 per cent has to include the costs of advice and administration - I don’t think so. ”
But after saying that in Sweden it costs 0.37% to administer the scheme he added: “I think it can be done more cheaply than we do it at the moment. If we can simplify the product and the administration, then you will get efficiencies which will bring the price down.”
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