15m workers not ‘sufficiently’ saving for retirement, says top pensions chief
Tens of millions of working people will face a crisis in retirement with the current automatic salary contribution “no longer sufficient,” the boss of one of the UK’s largest pension providers has warned.
Around 15 million people are set to suffer in retirement as workers use their automatic eight per cent auto-enrolment pension contribution as a ceiling rather than a foundation on which to build.
Writing in today’s CityAM, Standard Life chief executive Andy Briggs said the forthcoming Pension Commission must lead to “radical change and meaningful action”.
“If this doesn’t happen then millions of people will have poorer retirements, burden on the state will increase and the UK economy will be weaker”.
The Pensions Commission is set to publish its final report and recommendations for industry reform, which will outline the legislative road map for decades to come, in the next year following a period of consulting with the public, employers, and industry.
Briggs – who was City Champion of the Year at the CityAM Awards – said he remains “optimistic” that the findings of the report will conclude that “auto-enrolment contributions set at eight per cent are no longer sufficient”.
Pensions warning bombshell
The warnings come on the heels of the Pensions Commission’s sobering Interim Report last week, which paints a stark picture of workers living in a false sense of security.
While the 2012 automatic enrolment initiative successfully brought millions of new savers into the fold, fresh data revealed that a third of all private-sector employees are now saving only the bare minimum required by law.
This flaw is amplified by strict eligibility criteria that legally locks out an estimated four million part-time and low-earning individuals from automatic enrolment entirely.
The report highlighted a blind spot for the self-employed economy, revealing that a mere four per cent of workers are actively saving for their later years.
Briggs has been a vocal critic of some of the pensions reforms announced by Rachel Reeves in the last year. Following the shake up of salary sacrifice from 2029 revealed in last year’s Autumn Budget, Briggs told CityAM it could lead to “people saving less”.