We cannot afford to be complacent’ – Butcher

The pensions industry cannot afford to be complacent despite the success of auto-enrolment, Pensions and Lifetime Savings Association chair Richard Butcher has said.

Speaking at the PLSA’s annual conference in Liverpool yesterday, 17 October, Butcher said: “We’ve had success with policy, we’ve had success with governance, all of these things are good things, we’ve made good progress, but we can’t afford to be complacent. There is much more work that needs to be done,” he said.

For example, he noted that 80 per cent of people do not know how much money is needed to save towards retirement, and that’s got to be a “train crash waiting to happen”. He added that over half of people think that the auto-enrolment minimum contribution rate is the government recommended savings rate.

“The average defined contribution pot at retirement is stuck stubbornly at around £30,000 and you and I know that £30,000 isn’t nearly enough to provide a sustainable income in retirement.

“According to the Financial Conduct Authority (FCA), over half of people who have accessed freedom and choice between April 2015 and September last year fully encashed their pots, and half of those people, took that money and put it into another savings product.”

Butcher said he can believe that it might be a good idea for a few people but not for the vast majority of people.

“It isn’t working as well as it should do and we can’t be complacent,” he said.

In addition, he also spoke about auto-enrolment and the need to increase contribution rates to 12 per cent, with “employers bearing a higher burden” of that contribution.

    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.