Paul Riddell, Director, AXA Wealth, says: “Nobody will be surprised to hear about the changes announced in the Autumn Statement. We are all expecting to work later and later in life. What isn’t clear is how the government and pensions and savings industry is going to work closer to encourage more people to save appropriately for the future.
“AXA’s latest Big Money Index found that 42 per cent of people aged 45 to 54 are not currently saving for their retirement at all and 36 per cent said that they will be postponing their retirement and relying on continued employment to support themselves in the future.
“For many years there have been calls for better financial education, both in schools and in the workplace. Our research shows that the many initiatives that have been launched don’t appear to have made much ground. We all need to think longer and harder about how we will fund our retirement and we all need to accept that it will not come as early as we might like. There is no doubt that without the right planning, that starts at an early age, people will need to accept that they will be working well into their 70s.
“These changes will have wide-ranging implications for the economy, for employers and employees both young and old, and for our wider society. We need to assess the full impact of these changes, which won’t truly be known for many years, and we need to develop a coherent and joined-up strategy with the government at national and local level, to combat the real issue of apathy and ensure that everyone understands the implications of not saving for their future.
“The term ‘state pension’ is increasingly becoming out-dated. It sends out a message that people may be able to rely on it as their sole pension income. This just isn’t the case. A more realistic message that we need to help people understand is that the Government will provide a ‘later life income supplement’ to your own personal provision. The state benefit may support your ‘life’ but it’s highly unlikely to support any kind of ‘lifestyle’.
“We need a radical overhaul in the way we support and communicate the importance of saving for the long term by focusing on transparency, value for money and most of all plain English."
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