A group of businesses, employers, think tanks and charities have joined forces to urge all political parties to commit to addressing gaps in pensions adequacy in the UK.
The group has written an open letter calling for a commitment to a holistic review of pension adequacy in the next Parliament, covering both state and private pensions.
It insisted this is an “urgent issue” as 14 million defined contribution pension savers are not on track for the income they expect.
“Automatic enrolment has undeniably been a major success in increasing people’s retirement savings. 79% of employees now contribute to a workplace pension, an increase from 47% prior to its introduction in 2012,” the group wrote.
But, it warned that millions are still not expected to have a comfortable retirement income.
“Lacklustre real-wage growth, combined with the current minimum auto-enrolment contribution rate of 8%, is not enough to meet many people’s future retirement income needs.”
Signatories are Phoenix Group, Age UK, Capital Markets Industry Taskforce, Centre for Ageing Better, Chartered Institute for Personnel and Development, Confederation of British Industry, Demos, Independent Age, Living Wage Foundation, The Investing and Saving Alliance (TISA), Tom McPhail (The Lang Cat).
Phoenix Group chief executive Andy Briggs said: “The UK’s under-saving crisis is bubbling below the surface, with the potential for huge consequences for worsening retirement poverty in the coming decades.
“We have an ageing society that is living longer on average than previous generations, so it’s crucial our pension system is set up to support people achieve an adequate income in retirement that might last over 30 years.
“Phoenix Group urges all political parties to commit to reviewing pensions adequacy and ensure all existing and new policies support people to have a suitable level of retirement income.
“A plan for increasing auto-enrolment minimum contributions should be part of this as inaction risks people being lulled into a false sense of security that saving at the statutory minimum will be enough.”
There is always a balance to be struck between enforced saving for tomorrow and necessary consumption today – alongside a degree of discretionary expenditure. If income comfortably exceeds outgoings it is easy to save, but for most families – paying massive taxes (direct and indirect)-to support an extravagant, unaccountable and inefficient public sector – funds for additional pension provision are scarce. Most share the burden of meeting the spiralling cost of public sector pension schemes, leaving very little left for their own pension provision.
I see Pheonix get to bethere twice!!
The denominator, as always, is wider enrolement with more money…
How about no more charges after 15 years; or all your double dipping covert thefts returned….
For the aged in the aging society, top up your State Pension first, then try iSAs and Premium Bonds.. for the younger, you don’t have a comfortable income now (85%), so why worry about one in the future?
In your early 20s? Try Casinos and big race handicaps – flat – returns are pretty good, and you don’t need all the AI, systems, charges crap either! If it fails, at least you have time to make it back… unlike the chrarges levied win or lose… 🙁