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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 Now After 5 years #helptosave Coins designed by John Merlino from the Noun Project Queen designed by Bohdan Burmich from the Noun Project

Help to Save: Defusing the pensions time bomb

shared by policyexchange on Jan 22
11 million people are at risk of entering ‘pensioner poverty’ when they retire. With the average pension pot standing at £36,800 a person will need to save six and a half times more to reach the ...


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