Pensions - Articles - Barclays comments on ONS pensions data

 “It is encouraging to see increasing numbers of people engaging in pensions. However, there are some concerns that there have been significant increases in the private sector of employees making smaller contributions, with 33% of employees with workplace pensions making contributions of less than 2%, compared with 11% in 2013.

  

 “While we should remember that these figures are likely to improve as minimum contribution rates increase under auto enrolment, the findings are an important reminder that the level of contributions paid by DC members is still woefully short of the required level to achieve a reasonable standard of living in retirement. Our own research suggests that, on average, individuals want a standard of living in retirement which would require a ‘Living Pension’ income of £17,500, meaning that someone aged 22 would need to be paying 12% of income into their pension.*
 
 “Financial guidance therefore needs to take a long term approach and look to engage with employees at the earliest point in their career to ensure they understand the benefits of workplace pensions and plan appropriately to meet their retirement ambitions. With three quarters of people needing help just to understand what their likely income will be in retirement, it is clear that more must be done to support individuals with their long term savings if the UK is to avoid a generation of people retiring in poverty.”