Pensions - Articles - Comment on DWP Employers Pension Provision Survey

 “Notwithstanding the success of automatic enrolment in getting people into pension schemes and into the savings habit, average contributions rates to DC pension schemes have actually fallen and millions are not on track to receive even an adequate income in later life.

 “Alternative forms of saving will not fill the gap, because saving rates in general are at an all-time low. The prospects for property ownership and inheritance do not look good either.

 “Moreover, the pension contributions that are being made are all too often invested in under-performing default funds; data from JLT Employee Benefits’ recent AE Watch shows annualised returns ranging from 4.7% to 8.24%. Given that up to 90% of DC scheme members can be in such funds, often by accident rather than design, this is an issue of major concern.

 “If we are to improve retirement outcomes then more still needs to be done to support members in both the accumulation and decumulation phases. Therefore, building on the success of automatic enrolment in reversing years of declining pension scheme membership, we need to keep nudging people in the right direction. More support will help with informed decision making and, as demonstrated by automatic enrolment, inertia can be used positively to improve pension inputs, outputs and outcomes.”