In a report released today (October 12), the PLSA proposed five reforms that it said will help millions of people achieve a better income in retirement.
If acted on, a median earner would see their pension income increase from around £15,000 a year to around £19,000 – an increase of almost £4,000 or 25 per cent.
This would also mean the government would achieve the target income suggested by the Pensions Commission.
PLSA chair and director of workplace at Aviva, Emma Douglas said: “Now, in the middle of a cost-of-living crisis, is not the time for radical change but by providing a clear ‘roadmap’ for reforms, government will give employers and pension savers time to plan, which will help to ensure better retirements.”
The research found that the 50 per cent of people who will fail to meet the retirement income targets includes people on average earnings as well as under-pensioned groups.
This includes people, usually women, who take time out of work to care for others, and specific elements of the workforce such as the self-employed, gig-economy workers and people with part-time jobs.
The research also found that around a fifth of households are likely to achieve less income than needed to meet the minimum level of the Retirement Living Standards.
In today’s report, ‘Five Steps to Better Pensions: Time for a New Consensus’, the PLSA reviewed the current pensions framework and modelled the impact of a range of potential interventions.
The PLSA said: “If policymakers plan now and set out a roadmap for reforms, over the next 10 to 15 years a new framework could be implemented to substantially improve the prospects of the majority of savers.”
It’s five recommendations for reform were:
