“Auto enrolment has been a fantastic initiative in getting people starting to save towards a pension. It is really encouraging to see the sharp increase in participation since its introduction. But there’s a real danger of a missed opportunity to build on what has been started if the government doesn’t act now to engender higher saving rates. As a nation we are still massively under-saving for retirement. Auto enrolment has been a commendable start but we need to go further. Three quarters of DC savers will not be able to retire on an adequate income. It should be a priority for the new government to commit to the schedule of increasing auto enrolment contribution levels, as even lifting contributions to 8% isn’t going to close the gap. For many to be able to retire on an adequate income, contributions in excess of 20% are needed. Clearly this isn’t practical for most due to competing financial demands, but it underscores the pressing need for to save more and for the Government to do all that it can to support that.”
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