The LSI, has brought together influential stakeholders from across consumer, savings and pensions markets, and aims to identify, understand and propose solutions to the fundamental challenges everyday people face when managing their money. Today’s announcement follows shortly after pensions and investment reforms featuring as key areas of the UK Government’s Spring Budget.
Schroders hosted a summit in December with the PMI and key parties to discuss the issues. The output of the first part of the research, unveiled today, has mapped out three key areas in which UK savers need support –
• Financial resilience
• Rising costs of housing
• Long-term retirement needs
The report brings together industry findings from a wide range of sources. Over a fifth (22%) of adults are borrowing more money to keep up with living costs, the proportion of pensioner households renting privately during retirement could increase 3-fold over the next 20 years and the UK has a projected £350 billion annual long-term savings gap.
The LSI is a multi-stage project which, first, aims to define and quantify the extent of the problem, before identifying solutions and seeking to deliver change by handing recommendations to policymakers in a white paper later this year.
Schroders and the PMI have today shared the outputs of the first stage of the project with a broad range of senior stakeholders across pensions policy, regulation, business and think tanks. In doing so, Schroders and the PMI hope to spark a broader conversation and build consensus about how to address the challenges of the current lifetime savings market.
Schroders and the PMI will continue, alongside their expert panel, to the next phase, focusing on practical solutions to the problems that have been identified.
Ruston Smith, Chair, Pensions Management Institute, said: “We are today announcing we have delivered on the first stage of this initiative: defining the problem. We have identified key pinch points which are preventing people from building financial security in both the short and long-term. As this is such an important societal problem, spanning across a number of regulatory regimes, we want to share our insights and take a collaborative approach to broaden the discussion. We want this initiative to be a real force for positive change, to help people have easier and better choices and therefore better outcomes and greater financial security.”
James Barham, Executive Chairman, Schroders Solutions, said: “We hope that the breadth and depth of our panel will help to break down the silos between different areas of the savings system and allow us to build a consensus around what needs to be done to address the key challenges facing people saving today.
“Many stakeholders are worrying about these problems and a great deal of splendid work has been done already. This is why we are sharing our data pack now, in the hope that we can enrich the debate, and spark more conversations. It makes for sobering reading, but our hope is it acts as a trigger for more people to join the debate. “Because together we passionately believe that if we can address some of the problems of the lifetime savings market the benefits to the UK, and its millions of citizens is almost immeasurable.”
In addition to savings and pensions specialists, the LSI has spanned a mix of organisations such as retailers, debt charities, financial education charities, unions, insurers, banks, platforms, fintechs and consolidators.
Click here to read the LSI report in full.
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