Rate cut will "unleash catastrophic damage" on pensions, warns deVere

Green says that the reason people are not borrowing is that there are "real and justified concerns" about domestic and international demand and, as a consequence, there’s little investment incentive.
 
He adds that a cut in interest rates also actively discourages people from saving at a time when "it is clear, and absolutely vital, that we need to promote a savings culture in the UK to tackle a burgeoning pensions crisis and a looming care crisis that could negatively impact not only individuals but the wider economy too".

He also noted that the measures further push down gilt yields, meaning lower pensions as the money paid out from annuities and income drawdown policies falls.

Green says that falling yields will also further drive up pension deficits. The UK’s pension funding hole has now hit a record high of £935 billion.
 
deVere has also raised concerns that many company pension schemes will need to impose "radical changes to the members of their schemes" in order to survive.
 
Green concluded: “Anyone recently retired or on the cusp of retirement is at risk of having the retirement income they saved severely eroded by the Bank of England’s policies.

"Slashing incentives for people to save, making millions of pensioners – a critical demographic for the economy - permanently poorer, and further crippling company pension funds can never be the answer to the country’s economic woes.
 
“A different solution - a more direct way of boosting growth - rather than forcing gilt yields lower, has to be found by the Bank of England.”