Smart Pension has released a report entitled, “Delivery 2030: A blueprint to transform the UK pension system, deliver the future of retirement and leave no saver behind.”
Jamie Fiveash, CEO, Smart Pension UK said:
“Today’s workers are navigating the biggest shift in demographics for many generations, which poses a great threat to the retirement savings system. Today’s savers have no role models, they are not saving enough, and the system works against them in many ways. On top of that, the recent policy priorities do not address the most fundamental issue – savers aren’t saving enough. Now is the time to act and use the time between today and 2030 to implement a plan which will ensure that no saver is left behind.”
Ten years ago, the UK took “a radical step in helping savers.”
It’s time for more action, according to Smart Pension.
Populations are ageing at a time when “cost of living crises, climate events, conflicts and financial market fluctuations have exposed fragility in our economic and social systems.”
Amid this, for many UK workers the most fundamental question – “Will I have enough money to be able to live comfortably in retirement?” – remains unanswered.”
The UK took an unprecedented step towards “solving this issue a decade ago, bringing millions of people into pension saving ‘by default’, for the first time, through auto enrolment. But it was a single step on a path we must move further forwards on with similar boldness to ensure we avoid huge potential issues facing future pensioners’ finances.”
As we head towards 2030, we have the opportunity “to put everyone in the UK in a better position, ensuring that ‘no worker is left behind’, that we make the most of the opportunity to build UK pools of capital to support the wider economy, and that we shape a system that provides a better future for all.”
It is encouraging to see a consensus emerging “within the industry around some key measures. However, though it is crucial that we use the time between now and 2030 wisely and with a strategic focus there has been little by way of a timetable and a pragmatic pathway for how this should be achieved in the coming years.”
Now is the time for the pension industry and government “to work together to create a plan and a timetable to address this.”
This paper presents a blueprint for “the evolution of retirement saving in the UK. It sets out a series of recommendations, with timings for implementation.”
Smart Pension’s update noted:
“We are calling on governments to use the time between today and 2030 wisely, to put every worker in the UK in a better position for their retirement and ensure that ‘no saver is left behind.”
Smart Pension notes that its recommendations include:
- The delivery of urgent ‘no regrets’ changes, to be scheduled immediately, to radically improve the retirement system and savings of every saver in the UK
- A real and urgent focus on the delivery of proposals already in motion, but not timetabled: phase in the removal of the lower earnings limit as a threshold to pensionable earnings under auto enrolment, change the qualifying age for auto enrolment from 22 to 18 so that all employees of age 18 and over save automatically, implement the Value for Money (VfM) framework, commit to the timetable for an increased minimum contribution rate and implement the pension dashboard.
- Establishment of a new and independent Pensions and Savings Commission, to create a true long-term approach to UK retirement saving
- Pensions are long-term savings vehicles and should be governed by long-term thinking. However, much-needed reform has been hampered by short-termism from policymakers.
- We need to develop a resilient, long-term strategy that transcends the short-term horizons of electoral politics.
The commission would bring together “representatives of all parts of the industry and government to develop a National Pensions and Savings Strategy for the UK, with cross-party political input and decision-making, providing a long-term roadmap for the next 15-20 years. The chief objective of the new commission’s strategy should be to create a future in which everyone can enjoy a comfortable retirement.”
For more details, check here.