Gail Izat, Managing Director for Workplace and Retail Intermediary at Standard Life, part of Phoenix Group said: “The PLSA’s Retirement Living Standards play a vital role in helping people picture the kind of retirement they want, and what they might need to save to achieve it. We know that saving for retirement can seem abstract and overwhelming, especially when people are facing intense financial pressure day to day. Having a clear and relatable benchmark to aim towards is important for people at all stages of life.
“The standards also help us to recognise that retirement costs aren’t equal for everyone. Our recent analysis* shows how pensioners in one-person households face a significantly higher savings requirement than those living with a partner in retirement to reach the same standard of living – highlighting the need for personalised planning and support. It’s good to see the standards updated again to reflect the constantly changing world we’re living in.
Auto-enrolment minimums not enough for moderate standard of retirement
“The reality is that current minimum auto-enrolment contributions of 8% are unlikely to be enough for most people to achieve the lifestyle they hope for in retirement – our calculations find that someone starting work at the age of 22 and retiring at 68 might need to contribute around 11% for the duration of their career to meet the current moderate standard, including the state pension**. Many people are lulled into a false sense of security by thinking that the default contribution levels will deliver the type of retirement they aspire to. Ultimately, we need a sustainable roadmap towards higher contributions which we hope the next phase of pensions review will take into account. The PLSA standards, alongside other tools like pension calculators and engaging communications, help savers as well as employers and the industry as we work together to support better outcomes.”
|
