Pensions - Articles - Partnership on the Melbourne Mercer Global Pension Index

 “Indeed, amongst the recommendations that they make is to ‘restore the requirement to take part of retirement savings as an income stream’ and ‘raise the minimum pension for low-income pensioners’. While the flat-rate state pension is designed to do the latter, there is some suggestion that everyone will not be eligible for this so we may well find ourselves in a situation where people have spent the pension savings they have and don’t have sufficient state support to survive.

 “Given the complexity and importance of the decisions that people must make at retirement, along with the need to ensure that essential living costs are met for the remainder of one’s life, we believe that there is a case to be made to look at introducing a default model for those with low retirement income.

 “This is something that the Murray Review in Australia has recommended as they work to review the impact of comparable pension freedoms over the long-term. They suggested the introduction of a ‘Comprehensive Income Product in Retirement’ as they believe that such a move could increase private incomes for many in retirement and provide them with peace of mind that their income will endure throughout their retirement.

 “It is our belief that policy makers in the UK should consider similar policy developments to those in Australia, and in particular ways in which defaults could be designed to protect and support retirees in the UK from poor outcomes when confronted with complex financial choices, which few are equipped to make, while maintaining the Government’s freedom and choice agenda.”