Help to Save: Defusing the pensions time bomb

The UK is sitting on a pensions time-bomb as people are failing to save enough 1 in 7 of those intending to retire in 2013 will only have the state pension An estimated 40% of people between 22 and state pension age will not save enough for a decent standard of living in their retirement Even with auto-enrolment on an 8% contribution scheme people would still be many tens of thousands of pounds short of what they'd need Required pot £240,000 40% 8% pot over 40 years But it won't be enough - nearly 1 in 5 pensioners retiring in 2013 will be below the poverty line That's 11m people £132,000 Average pot £36,800 Source: DWP (Figures based on average salary of £27,000) Source: Prudential, Class of 2013 And demographic pressures mean the situation is only going to get worse Solutions The proportion of the population over the age of 65 will reach nearly a quarter by 2050, and the number of people over 85 - who require more expensive care - will have more than tripled Our report provides seven proposals for reform, but these are the most important two: 1. Increase minimum 2. Remove opt-outs to make 2012 contribution rate pension enrolment compulsory from 8% to 12% 12% over 5 years 2050 8% 0-15 16-64 65-84 85+ Government contribution Tick box to 2050 opt-out 2012 Company contribution Over the same time period, the cost of long-term care and pensioner benefits will rise nearly 50% Policy Exchange 8.4% 12.4% Personal GDP GDP contribution To read all seven proposals, see the report at bit.ly/pxpensions Now After 5 years #helptosave Coins designed by John Merlino from the Noun Project Queen designed by Bohdan Burmich from the Noun Project