Piling cash is better than putting cash into a pension, according to the Bank of England’s chief economist.
Andy Haldane has revealed he believes investing in property gives a much better financial return than saving into a pension.
Haldane, 49, argues that while Britain has a housing shortage, fast rising home prices will always offer a better home for retirement savings.
He disclosed his opinion in a recent interview with the Sunday Times newspaper.
“Pensions ought to be better but it’s almost certainly property gives a better return,” he said.
Pensions ‘too complicated’
“As long as we continue not to build anything like as many houses in this country as we need to we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north.”
Haldane has two homes – one in London and a holiday home on the south coast.
It’s not the first time Haldane has spoken out against pensions.
Earlier on 2016 he criticised pensions as too complicated and claimed as an economist he did not understand how they worked.
“I consider myself moderately financially literate – yet I confess to not being able to make the remotest sense of pensions,” he said. “Conversations with countless experts and independent financial advisers have confirmed for me only one thing – that they have no clue either.”
£182,000 a year salary
Haldane believes ordinary savers cannot make informed decisions about their retirement finances because the pension system is too complex.
His remarks have triggered angry responses from former pensions minister Ros Altmann and experts in the pension industry. They feel his remarks are undermining attempts to persuade workers to save more to fund their retirements.
Haldane has also spoken about his views on wealth.
Although he earns £182,000 from his role at the Bank of England and expects an £80,000 a year pension, he does not believe he is wealthy.
“I see myself as not having to worry about money, but plainly not wealthy. I never have felt wealthy, and never expect to in this job,” he said.
“I don’t have a credit card as I have never seen the need. I always spend on debit cards.”
