Industry expresses unanimous support for ‘milestone’ PLSA report

The pensions industry has expressed unanimous support for the new Pensions and Lifetime Savings Association (PLSA) report, hailing it as a “milestone” moment for the debate on pensions adequacy.

The report, Hitting the Target – A Vision For Retirement Income Adequacy published today, 5 July, founds that 80 per cent of people believe they are not saving enough for retirement and recommended that the government introduce targets in order to improve savers engagement, which has been praised as an “excellent start”.

Pensions Management Institute technical consultant, Tim Middleton, said: “The PLSA’s suggestion of retirement income targets as a way of focusing public attention on the need to start retirement saving from an early age is welcome.

“We are also encouraged by the suggested programme for increasing minimum contribution levels through auto-enrolment and agree that the proposed changes from the auto-enrolment review should be implemented promptly.”

The People’s Pensions head of policy, Andy Tarrent, echoed Middleton’s message: “The PLSA’s saving targets will help people to judge more accurately how much they need to save. To give people the confidence to make those extra savings, there are also reforms the industry itself can usefully undertake - and the PLSAs roadmap is an important contribution as to how the can most effectively be done.”

JLT Employee Benefits director, Nick McClelland, fundamentally agrees with the sentiment, but feels it is an opportunity for employers to go further in their contributions and suggests that education alone may not be enough.

“Employers are in a unique position of trust to help employees improve their financial wellness at each stage of the career cycle and we recently found that there are significant business benefits for employers who develop such a strategy.

“The industry also needs to recognise that simply facilitating education and guidance may not be enough, and that people’s individual personalities play a significant role in their propensity to save.”

Worryingly, the PLSA found that 51 per cent of people wrongly thought that the auto-enrolment minimum pension contribution level is the government’s recommended amount, and there is a lot of support for rising the contributions, but differing opinion on how this should be done.

AJ Bell senior analyst, Tom Selby, commented: “The fact half of savers believe the auto-enrolment minimum is the Government’s ‘recommended amount’ is worrying as for most people this will fail to deliver a decent level of retirement income.

“Without action from Government, regulators and the wider industry there is a real risk millions of people will sleepwalk into a retirement disaster.”

Hargreaves Lansdowne head of policy, Tom McPhail, agrees that contribution rates do need to rise, but suggests evidence shows this can be done without government intervention.

Selby also feels that any rises should be done with caution, as “without first ensuring savers understand the value of retirement saving would risk a spike in opt-outs”.

Furthermore, Now: Pensions CEO Troy Clutterbuck feels that setting income targets would be a “natural fit” into the pensions dashboard, but that it was important savers had the correct information.

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.


Inside the world of high net worth lending
The mortgage market continues to evolve, and so too does the answer to the question: what is a high net worth individual in today’s market? In this episode of the Mortgage Insider podcast, host Phil Spencer is joined by Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank, and Islay Robinson, founder and CEO of Enness Global. Together, they explore what brokers really need to know when supporting high net worth individuals.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.