A consultation paper has been published by the Pensions and Lifetime Savings Association after a year of research.
During the course of their research they discovered that 51% of respondents “believe that the Government’s minimum automatic enrolment contribution rate is the recommended amount to save for retirement.” Only 20% of respondents felt they were saving enough for retirement.
We all know there are pressures on the system, meaning saving for the latter stages of life is crucial. Longer life expectancy and the rising cost of care to name two factors. Rates of pension saving and home ownership are decreasing which could add further to that pressure in future years.
The PLSA report makes a series of recommendations to improve outcomes for future generations of retirees and hopes to influence government policy.
Here are the highlights of the recommendations:-
• Retirement income targets for savers to work towards
• Increase contributions for automatic enrolment from 8% of band earnings to 12% of total salary. The amount should be shared 50/50 employee/employer
• Improve Pension Scheme Governance
• Support for “at retirement” decision making
• Make it easier for older people to continue working
• Make it easier for retired people to access property assets
You can read the full report online here.
If you are concerned you are not saving enough for retirement get in touch. Don't wait for the government to catch up, you can set your own pension saving target!