Lizzy Holliday, Head of DC, Master Trusts and Lifetime Saving, PLSA said: “The PLSA welcomes Money and Pensions Service (MaPS) prioritising greater understanding of pensions in its 10-year strategy, a focus that was singled out by the PLSA in its 2017 Hitting the Target report.
“We support measures to improve engagement, and welcome MaPS’ goal to help five million more people understand enough to plan for later life. These aims should be underpinned by ambitious deliverables commensurate with the importance of pensions to people’s wellbeing. We also know savers are looking for reassurance about their pension decisions – we would like to see MaPS further empowered to support this approach – for example, by reviewing the advice/guidance boundary for MaPS.
“Many people are unable to balance current financial needs with future financial needs. According to PLSA research, only 23% of people are confident they know how much they need to save for retirement.
“We believe that the PLSA’s Retirement Living Standards can play a key role in helping more people achieve a better income in retirement.
“Like the ‘five a day’ healthy eating maxim, the PLSA hopes the Standards will one day become a rule of thumb for retirement planning. Roughly speaking, a single person will need about £10k a year to achieve the minimum living standard, £20k a year for moderate, and £30k a year for comfortable. Like 5-a-day, this can be briefly summarised as 10k-20k-30k. For couples, it's 15k-30k-45k.
“MaPS has already committed to include the PLSA’s Retirement Living Standards on its website, alongside other retirement planning tools. The Retirement Living Standards are well placed to help MaPS deliver Mid Life and Later Life MOTs as well.
“Savers can be confident that the industry is already incredibly focused on achieving higher levels of engagement.
Alongside the Retirement Living Standards, which have been widely adopted by many schemes, new technology, such as the Pensions Dashboard, which will allow people to see all their pension savings in one place, will raise awareness of pensions and help people picture their future and achieve a better income in retirement.
“Given the breadth and ambition of the 10-year strategy, the PLSA looks forward to working closely with MaPS to ensure the pension-related aims are delivered.”
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