“This report confirms that the biggest change over the last few years is the establishment of Defined Contribution (DC) “master trusts”. It suggests that as more funds build up in DC master trusts in coming years, and as more and more Defined Benefit (DB) pension schemes in the private sector close to new members, there is likely to be a shift from DB to DC in overall pension provision. This could mean that people become more reliant on DC pensions and that the risks associated with pension saving for retirement shift from the providers (the principal risk-bearers for DB pensions) to households who assume most of the risk of DC pension saving.
“This clearly requires a change of approach from Government and across the pensions industry. Auto-enrolment owes much of its success to inertia on the part of those enrolled into a workplace pension scheme. Greater attempts must be made from now on to promote a greater member understanding and engagement with pension arrangements, as well as the adequacy, or otherwise, of what their funds will secure for them in income terms in retirement.
“At the present time millions of people are sleep-walking into a very insecure old-age and need to be helped and supported along the way.”
To view the ONS report click here
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