The Institute and Faculty of Actuaries (IFoA) has called for a priority focus on increasing pension saver outcomes as the UK Chancellor gets set to announce future financial priorities in the forthcoming Budget Statement.
The IFoA’s recent 'How much could you lose?' report explores the hurdles that people in the UK face when wanting to save for their retirement. The report has drawn attention to several pension gaps that exist for savers, as well as potential remedies, and captures the growing concern within the pensions industry surrounding the impact of under-saving on retirement adequacy.
IFoA Pensions Board Chair, Debbie Webb said: “We have seen much speculation in recent weeks on expected pensions announcements that involve re-examining pensions tax arrangements, or national insurance contributions. Pensions tax relief acts as an important incentive for people to save for their retirement. Reducing this incentive risks hitting the retirement prospects of millions of savers who are already not saving enough for an adequate retirement. It could also undermine the encouraging shift in the UK’s saving habits brought by initiatives such as automatic enrolment. If changes are to be made, we urge the government to proceed carefully and in consultation with the pensions industry to ensure changes are properly implementable, without unintended consequences and address inequalities to help UK savers to build towards a comfortable retirement."
“The IFoA is supportive of change within the world of pensions, be it through increasing investment in productive investments, or the recent introduction of collective defined contribution (CDC) schemes in the UK. This is as long as the primary aim remains helping people in the UK to save for an adequate retirement."
“The forthcoming pensions review offers a chance to reset the agenda in terms of helping people save for their retirement. This will not be an easy nut to crack and to be successful we need innovative ideas and for all stakeholders to play their part in the change that is needed – government, employers, pension providers, and individual savers.”