Road Map for Pensions and Long-Term Savings
The UK has the largest pension and long-term savings system in Europe. Pension fund assets alone stand at nearly £2 trillion. In conjunction with our robust insurance and broader financial services sectors, pensions and long-term savings play a pivotal role in ensuring a comfortable retirement for millions of individuals.
However, the UK is falling short of achieving the desired retirement outcomes for many citizens. The Mercer CFA Global Pension Index 2023 places the UK at 13th of 47 countries, with room for improvement. Approximately 17 million adults in the UK are not currently saving enough for retirement. Only 3% of millennial households with median income are projected to meet a "moderate" standard of living in retirement.
Furthermore, the UK has a growing pension saving gap. Data from the World Economic Forum (WEF) shows that the UK’s pension gap will rise from £6 trillion to £25 trillion by 2050. According to the WEF, people born today could have a life expectancy greater than 100 years, if that is the case the cost of providing security in retirement for a rapidly ageing population is the financial equivalent of climate change.
Widening gaps in retirement income not only present challenges for individuals but also impose fiscal and political pressures for the government. Policymakers now have a golden opportunity to establish a proactive approach that sets us on a trajectory of secure outcomes and economic growth, rather than burdening future generations with mounting challenges.
Our road map addresses three key challenges:
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Low standards of living for retirees
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Low productivity of long-term savings
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Low saver engagement
Road Map for Pensions and Long-Term Savings
- Wealth Strategy Leader