A new report has warned that millions of Brits risk reaching retirement age under-pensioned.
The research was conducted by the Pensions Policy Institute (PPI) and now:pensions, and their findings established that nearly 9 million people in the UK are still under-pensioned relative to the rest of the population.
The report identified some under-pensioned groups having access to private pensions worth as little as £3,650 to £6,750 per annum. Even factoring in the state pension, many of those people could end up exposed to financial insecurity when they reach retirement. It is estimated that 30% to 40% of employees in the private sector saving into DC pension schemes will fall short of the incomes needed to sustain a comfortable retirement.
Under new rules introduced in 2012, workplace pension auto-enrolment became a feature for many employees, radically changing the way workers plan for retirement. As a result, it brought over 11 million extra people into their workplace pension scheme. Analysis by The Times newspaper has found that whilst auto-enrolment has meant more people saving towards a workplace pension, it has concurrently meant a sharp reduction in employer contributions.
This trend is confirmed by DWP data showing pension savings increasing by £28 billion from 2012 to 2020, whilst company contributions declined by 16% (or 30% when factoring in inflation). This trend is likely to continue following the rise in employers’ national insurance contributions.
If you are retirement planning in Cheshire and require tailored advice, call our team at Hartey Wealth Management today to help you achieve financial security in later life.
