The Institute for Fiscal Studies (IFS) has published its 2025 Pension Review. The independent report claims the UK pension system is facing serious and mounting challenges and that urgent reform is needed. Investors who are retirement planning in Cheshire may be interested in their conclusions and suggested improvements.
The report warns that millions of people may have inadequate retirement income in later life as a result of systemic lapses in state and private pension provision. It concludes that current policy is delivering an unsustainable ‘triple lock’ policy, while younger people, the self-employed and women do not have sufficient private cover.
The IFS observed that approximately 80% of self-employed people are not saving for retirement – a phenomenon that risks exacerbating inequalities in old age. To address the situation, the IFS is calling on the Government to act decisively. It has, therefore, come up with a list of concrete recommendations that it claims will improve the UK pension landscape for the retirees of the future.
It advocates a four-point pension guarantee, which includes an earnings-linked official state pension in addition to reform of private pension provision. It also suggests expanding auto-enrolment and higher default contribution levels for middle to higher income earners.
Speaking on behalf of Pensions UK, director of policy and advocacy, Zoe Alexander, welcomed the report as a ‘timely and welcome contribution’. Her team has similarly conducted research, which found that 20% of working households could struggle to make ends meet by not satisfying the minimum Retirement Living Standard.
