Pensions - Articles - Heading towards a disappointing retirement

 ‘Under the Government’s automatic enrolment scheme, participating employees are currently obliged to contribute just 1% of their pay into a pension, with a further 1% contributed by their employer. As more and more small firms are enrolled, the proportion making the legal minimum contribution is likely to continue to rise and could easily be a majority of all workers by 2018 when all firms have met their legal duties.

 Commenting on the figures, Steve Webb, Director of Policy at Royal London said: “The way things are going, by the time automatic enrolment is complete, around half of all private sector workers will be paying at or around the statutory minimum level of contributions. Even when the statutory minimum rises to 8%, this is still far too little for most people on average earnings or above to have an acceptable standard of living in retirement. Millions of people face a disappointing retirement unless the government takes action to get contribution rates up. The 2017 review of automatic enrolment provides an ideal opportunity to address this issue as a matter of urgency, rather than kick it into the long grass”