With the starting gun for the general election fired, the Pensions and Lifetime Savings Association (PLSA) wasted no time in urging the next government to tackle the deficit in pension savings as a priority.
Yesterday, prime minister Rishi Sunak announced that the public would finally get to vote on 4 July 2024, as the rain poured down outside 10 Downing Street.
In response to the surprise announcement, the PLSA said the next government needed to take action in its first 100 days in office to “to help everyone reach a good income in retirement”.
Extend auto enrolment
The association acknowledged that auto enrolment (AE) has helped 19.4 million people start saving into a pension, but it said “too many are excluded, and many of those in AE are not saving enough”.
PLSA research found that more than 50 percent of savers will not achieve retirement income targets set by the 2005 Pensions Commission. If the next government doesn’t act quickly, most people in the UK will retire with inadequate pension income, it said.
It called on the next government to extend AE and allow people to save from the first pound of earnings and from age 18. It also recommended a roadmap to increase AE contributions over the next decade.
In addition to helping people save enough for retirement, the PLSA said the next government needed to do more to help people navigate retirement choices, support well-run defined benefit schemes, bridge the pensions and growth gap, and back the Local Government Pension Scheme (LGPS).
The future remains uncertain
Nigel Peaple, director policy and advocacy at PLSA, said: “Workplace pensions are a vital part of the UK economy. They provide an essential retirement income for millions of workers and drive growth by investing over £1 trillion in our government and economy. Today more people are saving into workplace pensions, and they have more freedom over how to use their savings. But the future remains uncertain as people are not saving enough for retirement.
“The next government must do everything it can to help everyone reach a good income in retirement. We have identified five key areas of the UK pensions system where we would like a new government to take action on quickly, within the first 100 days of government, to better secure the financial futures of millions of savers.”
