Pensions - Articles - Actuarial Profession on PPI Extending Working Lives Research


The Actuarial Profession Comments on PPI Extending Working Lives Research: "We now have a clear view of the problems that await the over 50's facing retirement, so it is time for all relevant bodies to sit around the table and identify solutions".

 The Institute and Faculty of Actuaries has jointly sponsored a report by the Pensions Policy Institute (PPI) called: “Retirement income and assets: the implications for retirement income of Government policies to extend working lives.” The report, published today, finds that almost half of all people in England (45%) over 50 years old and in work in 2011 will need to work and save for eleven or more years after state pension age if they are to retire with an income sufficient to replicate their working life living standards in retirement.
 Jane Curtis, President of the Institute and Faculty of Actuaries comments:
 
 “We welcome this research which has provided new and updated data that helps to identify the problems that await the over 50s as they reach state pension age, and that policy makers, regulators, the financial services industry, the Government and individuals need to tackle.
 
 “It is clear that improving financial literacy in the UK would have a significant impact on the ability of individuals to better understand and plan for their financial futures. Improvements to communications materials, removing jargon, demystifying the products that help people to save for their retirements or insure against health issues can only be a good thing.
 
 “This research looks at the adequacy of pensions savings of the over 50’s working population, the trend to work beyond state pension age, trends for working part time or more flexible working hours and what impacts on the ability to work – such as health issues. It also pinpoints factors that impact the level of income that individuals will receive when they retire. Analysing the data a number of issues can be identified:
 
 • “The proportion of people working beyond their state pension age is already increasing and suggests that a declining ability to afford a retirement lifestyle commensurate with their existing one is a reason why many people are choosing to continue working.
 
 • “40% of those currently over 50 in work and approaching retirement are on target to be able to retire at state pension age with an income that enables them to retain their current lifestyles. Prior membership of a defined benefit (DB) pension scheme is an important characteristic in splitting the pensions haves from the have not’s.
 
 • “50% of those with existing DB benefits are on target to receive a retirement income that enables them to retain their current lifestyles at state pension age and a further 20% of these people are able to reach it by deferring retirement by 1 to 10 years. This compares to a majority (over 60%) of those with no existing DB benefits who are not on track to receive a retirement income that enables them to retain their current lifestyle even if they defer retiring for more than 10 years after state pension age. Unfortunately the figures also show auto-enrolment (a new form of pension saving from October 2012) on its own is insufficient to bridge the gap for most of these people (see chart 18 of the report).
 
 “What is now clear is that there are a number of problems awaiting the over 50’s as they approach retirement. Consumers need more help to understand the impact that what they save now has on what they receive later. The financial services industry, employers and the Government need to work together to better communicate the options that are available to individuals, the benefits of these options and the over-arching message that you must save if you want to retire with an income that is sufficient to retain your current lifestyle”.
 
  

Back to Index


Similar News to this Story

Wish list for the occupational pensions industry in 2025
As one year closes and another begins, it's an opportune moment to set our sights on the future. The UK occupational pensions industry faces nume
PSIG announces outcome of Consultation
The Pensions Scams Industry Group (PSIG), which was established in 2014 to help protect pension scheme members from scams, today announced the feedbac
Transfer values fell to a 12 month low during November
XPS Group’s Transfer Value Index reached a 12-month low, dropping to £151,000 during November 2024 before then recovering to its previous month-end po

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.