According to a recently released report from the Institute of Fiscal Studies (IFS), the future of UK pension holders seeking a comfortable retirement is risky at best. The newly launched report is designed to support a review of UK pensions and aims to assess future risks and work out what must be done to secure a decent retirement outcome for the current working-age generation.
The institute commented on pensions considering the current financial climate:
“For the first time in history, since 2009 the average income of pensioners has been similar to that for those under state pension age. Pensioner poverty rates are lower than the population average. And more employees are saving into workplace pensions than ever before. These are all big policy successes.”
However, it added that the last two decades have also seen the continual drop in defined benefit (DB) pensions for the private sector, low interest rates, state earnings-related pensions abolished, falling homeownership, lower typical contributions for defined contribution schemes, as well as a pension savings collapse for the self-employed.
The IFS noted that while the introduction of greater pension freedoms has now given savers flexibility it also means there no longer exists the same level of longevity-risk-sharing that annuities and DB pensions provide.
UK workers with worries about the standard of living they will have when they are no longer employed often consult retirement planning specialists in Shropshire, Cheshire, and other counties. Independent financial experts like wealth managers offer comprehensive support with both pre- and post-retirement planning advice.
