The Government should do more to warn savers about the effects of 'loose' monetary policies, including quantitative easing (QE) and low interest rates, which have damaged pension savings; a Treasury Committee report on the Budget has found.
The report, which also highlights a number of areas of concern regarding Budget reforms, found that quantitative easing had 'penalised' savers, particularly those with 'drawdown' pensions and those reaching retirement now.
According to the report, on-going rounds of QE have caused an increase in asset prices and wiped the value off many pensioners' savings, leading the committee to call for the Bank of England to make a more detailed assessment of the effects of QE.
Quoting the bank's deputy governor, Paul Tucker, the report said it was sympathetic to savers, but argued the economy 'would have been destroyed' if QE had not taken place.
Some of the recommendations contained in the report regarding other areas of the Budget include:
The report also questioned Chancellor George Osborne regarding the confidentiality of the Budget, who confirmed that that some of the Budget's details had been leaked prior to official announcement on 21 March 2012. It recommended that the Government review its practices, adding that a 'Coalition Government was not a justification for Budget leaks.'
The Treasury said it would respond to all aspects of the report 'in due course'.