PLSA launches consultation to improve UK retirement

Hitting the Target – Delivering Better Retirement Outcomes seeks to consult on the development of a set of new national retirement income targets and on the changes to the current retirement saving system necessary to meet those targets.

As part of this consultation, the PLSA is seeking views from employers as to how a set of principles which facilitate later-life working might be developed. In addition, they are asking how the pensions industry can raise awareness of the options around drawing pensions while employed, as some people cease work as they believe they cannot access their retirement savings until they do so. Further analysis will be undertaken to determine exact income levels.

In addition to looking at how working longer might help people’s retirement prospects, as part of the consultation the PLSA will be looking at the following areas:

• How can we bring more people into the scope of auto-enrolment (AE) and spread the benefits of a successful implementation?

• Should the current system of tax relief be modified to support savers in achieving the new retirement income targets?

• How can we gradually increase the level of minimum contributions into AE – beyond those already planned - without discouraging people from saving?

• Can we do more to help people turn their property wealth into retirement income? Can pension schemes play a role in helping unlock the supply of housing which people need?

• How can we ensure that people get what they want when they turn their pension savings into income? What are the respective roles of defaults and engaged decision-making?

• How can we let people know about their money in ways and at times which make sense to them? How do we improve engagement by using simple standardised messages?

Graham Vidler, director of external affairs at the PLSA, said: “Savers will need support as they work to achieve the retirement income targets and we need to consider what might need to change within the UK retirement and savings market to facilitate this step forward. Our report sets out some of the changes we think are necessary but we want everyone with an interest in the nation’s retirement future to respond – challenging, improving and building on our proposals.”