UK - Fears that an increasingly mobile workforce are a threat to occupational schemes have been greatly exaggerated, a pensions think-tank claims.
A Pension Provision Group (PPG) report – Pensions and the Labour Market – says reports of job mobility are overstated and that people aged over 25 tend to stay with the same employer.
PPG chairman Tom Ross said: “There is a popular view that employment has become much more volatile with people experiencing more frequent job changes and, as a result, pensions based around the workplace are under threat.
“We have found this fear greatly exaggerated.”
He added: “In the key years – generally after age 25 – the increase in job mobility has been quite small and our view is that pension provision through the workplace is still likely to be the best solution for most people.”
The PPG report noted that those under 25, who do tend to change employers, more often are not sufficiently well served by the current arrangements for earning and transferring occupational pension rights and urged the government to undertake a review.
The group also voiced concern that many people were retiring early and finding themselves living for a prolonged period on a low income.
Ross noted: “It has always been the case that early retirement can be attractive to the better off. But, for many, early retirement is likely to mean a prolonged period of low income and dependency on state benefits.”
Another PPG report showed that many self-employed workers, contrary to common expectations, did not save enough for retirement.
• The PPG was created in summer 1997 to provide analytical and diagnostic input for the government.
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