Pensions Commission highlights challenges in retirement saving

The Pensions Commission has published an interim report showing that many people are not saving enough for retirement.

The report estimates that 15 million people are under-saving for retirement and this could increase to 19 million if no action is taken.

Findings in the report include:

• Around half of low and middle-earners are only saving at minimum Automatic Enrolment levels with little else to fall back on.
• 45% of working-age adults are not saving into a pension at all.
• Statutory minimum contributions made by employers mainly benefit higher earners.
• Only one in 25 of wholly self-employed workers is saving for retirement. For younger self-employed people, it is even fewer.
• Based on current trends, around three in 10 private pension pots are accessed at the earliest opportunity, with half of all pots taken out in full. Nearly half of these are spent on things like a car, a holiday or renovations.

The Pension Commission is looking at why tomorrow’s retirees risk being worse off than today’s and will make recommendations on how to reverse this.

A final report will be published in early 2027. Baroness Jeannie Drake, Pensions Commissioner, said: “The recommendations we present in our final report will address the need to secure adequate income in later life and a pension system that is fit for decades to come.”

If you would like help with your retirement savings plan, please feel free to get in touch anytime. We would be happy to help you!

See: https://www.gov.uk/government/news/britain-is-undersaving-for-retirement-warns-pensions-commission