Smart Pension, one of the UK’s workplace pension providers, launches a new integrated retirement savings calculator that could have a positive impact on the “projected” pension savings of its 1.4 million UK member base. The tool is described as being designed to help members model and predict the monthly pension contributions “required for a comfortable retirement.”
It aims to allow individuals to see “how much they’re saving and view their expected retirement income” against the PLSA’s Retirement Living Standards.
From there, members are reportedly able to change and carefully review scenarios based on different retirement ages as well as monthly contribution amounts, “clearly seeing the financial outcomes they could achieve in retirement with a small change to their contribution amount.”
Although more UK consumers are now saving into a pension pot thanks to auto-enrolment legislation, it’s “reported that 90% of Brits are still under-saving for their retirement, and many don’t even realize it.”
Even though some savers tend to underestimate just how much money they will “need to maintain their standard of living in retirement, many others are unaware of how much they’re currently saving each month and what that might provide them in retirement.”
The calculator was reportedly designed with the Fogg behavioral model in mind, aiming to “make it as simple to use as possible.”
This shows the drastic difference small actions can make to their long term savings forecasts, “alongside making informed financial decisions and planning ahead.”
Eve Read, Senior Director of Strategic Delivery at Smart Pension said that they recognized that lots of UK savers “don’t know how much they’re currently putting into their pension pot each month, how much they should be saving and what will be enough to retire on.” Read further noted that information on retirement standards is in “lots of different places so we wanted to bring it all together, with an instantly actionable solution.”
Read added that this is just one step among many aimed at “improving online tools and services to help members get the best out of their pension.” They also mentioned that the technology allows them to continually iterate their solutions to “ensure they meet the changing needs of UK savers.”
As clarified in the update, outcomes will differ based on individual circumstances. Example has been modelled based “on various assumptions including: 4% drawdown rate, annual inflation of 2.5%, annual pot growth of 5%.”
Smart Pension now exceeds £6 billion in Assets Under Management (AUM) and serves “over 1.4 million members” and over 70,000 employers.
Aquiline Capital Partners, Barclays, Chrysalis Investments, DWS Group, Fidelity InternationalStrategic Ventures, J.P. Morgan, Legal & General Investment Management, MUFG and Natixis Investment Managers are “all investors in Smart Pension.”
