Defining ambitions: Shaping pension reform around public attitudes
Queen's speech indicates IPPR-style collective pensions are closer to reality for Britain's saversArticle
Reform is underway to encourage people to work for longer and to save into a pension. However, contributing at the rates required by auto-enrolment across a full working life will give the current generation of employees a less than 50:50 chance of a decent income in retirement. New pension products and strategies are urgently needed to protect future living standards.
This report uses original qualitative research to explore the key barriers that are preventing people from engaging with pensions, and the underlying principles that they want from a pensions system, before assessing whether defined-ambition pension models could address these challenges and priorities.
It finds that public investment in pensions is being held back not by affordability alone, but by distrust of the institutions involved (including concerns that the government will 'move the goalposts'), a general lack of understanding about pensions, and the related fear of making the wrong decision. This demonstrates that better communication strategies, stronger governance structures, and long-term, cross-party commitments to policy are all essential components to successful reform.
Based on public attitudes, this report provides three core recommendations that policymakers and the industry should incorporate into the defined-ambition agenda:
- Ask members to set a target pension income.
- Offer protection against volatility by making a smoothed pension a lead option for auto-enrolment.
- Introduce a 'collective defined contribution' pension to the UK.
Related items
Achieving the 2030 child poverty target: The distance left to travel
On 27 March, the Scottish government will announce whether Scotland’s 2023 child poverty target – no more than 18 per cent of children in poverty – was achieved.Spring statement: A changed world calls for a changed course
If there are decades where nothing happens and there are weeks where decades happen, the last few weeks feel seismic. The prime minister was right to say the world has changed. Donald Trump’s re-election in November has unleashed a wave…2030 and beyond: Great British Energy's role in the green transition
The UK government created Great British Energy to help deliver secure, clean and affordable electricity.