Pete Glancy, Head of Pension Policy at Scottish Widows, said: “Auto-enrolment worked because it was bold, instead of tinkering around the edges. There's an urgent and pressing need to extend an auto-enrolment equivalent to the 96% of self-employed workers not currently saving into a pension. Pensions as we know them won't work for the self-employed – we need flexible products that sit alongside other savings and investments with a default 'opt-out' mechanism. The commission is right to look at supporting over 50s in the workforce, but half of those in poor health already face pension poverty. Extending working lives will require a joint effort between Government, employers and the healthcare sector to ensure that everyone is able to contribute to the economy whilst boosting their financial futures."
Mark Futcher at Barnett Waddingham, part of Howden said: “It's reassuring that the Pension Commission is focused on the right issues - but it now needs to put its foot on the pedal. Too much time has already been spent diagnosing the same problems, while lower earners, part-time workers and the self-employed continue to be left behind by the pensions system. And for everyday workers, our research highlights just how wide the gap between confidence and reality has become. While 65% of employees at medium-sized firms believe they’ll retire comfortably, only 24% have set clear financial goals and 60% don’t know where their pension is or what it holds - a clear sign that too many people are putting their retirement on autopilot and hoping it lands safely. With so much to tackle, there’s a valid concern that not everything can be fixed overnight. Nevertheless, the Commission’s final recommendations in 2027 cannot pull any punches. We can’t keep staring at the same problems year after year - it’s time for decisions that genuinely move the dial on retirement outcomes.”
Andy Briggs, Standard Life CEO, comments: “This report is in line with what we have been highlighting for years. Millions of people are not saving enough for retirement and the UK is edging ever closer to a pensions adequacy crisis. With only one in seven DC savers on track for a decent retirement, by 2040 the majority of DC savers are expected to retire with less than they expect or need. It is hard to see how any independent review could conclude that auto enrolment contributions set at 8 per cent are sufficient. While change cannot happen overnight, we should be setting a clear path towards increasing contribution rates to 12 per cent gradually over time. The report also touches on consolidation. The UK is an outlier among advanced economies in retaining a highly fragmented DC landscape. Consolidation improves member outcomes, and is not just a focus for system efficiency. It is about unlocking capability and larger schemes can invest to support infrastructure projects across the UK, and provide capital to growing companies while still meeting the primary duty to customers. Smaller schemes cannot do this consistently. Change needs to happen with urgency and at a much faster pace going forward. The longer we wait, the harder and more costly this becomes to fix.
Ruari Grant, Head of Policy and External Affairs at TPT Retirement Solutions: This is an important moment for us to digest this key Commission report on adequacy, especially after a period where so much attention has been diverted to structural and investment matters. As the report notes, 40% of workers are under-saving for retirement: this is sobering and I hope it will lead to some bolder decision-making – in AE we have the foundations, but at current thresholds, outcomes will remain inadequate. Let’s not forget, we’ve now been waiting almost a decade for the AE review’s recommendations to be implemented, and trends such as declining home-ownership and under-saving among the self-employed in retirement will only exacerbate the situation.The report’s focus on decumulation is welcome, as adequacy doesn’t simply rely on paying in enough – savers must also be able to access their money in a safe, simple and reliable manner without needing to understand all of the complex factors at play. The debate now has moved on: this is no longer about getting people to save, but ensuring the system they’re saving into will actually deliver a decent retirement. We look forward to engaging further with the Commission, especially with regard to how collective DC may assist with some of its identified structural challenges.
https://www.gov.uk/government/news/britain-is-undersaving-for-retirement-warns-pensions-commission
|
