The Department for Work and Pensions (DWP) this week announced plans to revive the Turner Pensions Commission, warning that without action retirees in 2050 could be worse off than today’s pensioners.
According to the DWP, around half of working-age adults, particularly lower earners and the self-employed, do not save for a private pension, leaving four in 10 people at risk of inadequate retirement savings.
It means those claiming their pension in 25 years time could face an annual income up to £800 or 8% lower than today’s pensioners.
Partnership approach
UKH chair Kate Nicholls said the commission represented an opportunity for a “comprehensive review” of retirement savings but stressed any changes must be carefully balanced.
“This is not an easy problem to solve. Consumers are still contending with a cost-of-living crisis, with every penny in their pay packet counting, and the cumulative cost burden facing businesses is the highest in recent memory”, she said.
Nicholls highlighted the impact of previous policy changes, such as increases in employer National Insurance contributions, which she said had resulted in job losses.
She added: “It’s crucial the commission embarks on a partnership approach with business and consumer groups to reach the right balance.”
Economic challenges
The trade body chair also welcomed the Government’s commitment not to raise employer pension contribution rates during this Parliament, calling it “the right decision and reflective of the economic challenges facing many across the country.”
Alongside the commission, the DWP said it would also review the state pension age, which is currently 66 and set to rise to 68 by 2046.
UKH said it would work closely with the commission throughout the review process to ensure that solutions are both sustainable and fair.
