UK - The pensions market is biased in favour of the wealthy while failing to reward the low-paid majority, according to right-wing think-tank the Adam Smith Institute.
The group – which has completed a series of top-level discussions with industry experts including Simplification Report author Alan Pickering and retail savings review author Ron Sandler – said the government must shift its focus towards employees earning £20,000 a year and below.
A spokesman said: “The stakeholder pension, with less than a million sold to date and largely bought by higher earners, amply illustrates the point.”
Among the Adam Smith Institute’s recommendations to the government is the abolition of annuities. The group claims retirement savings should be at the control of individuals and the government “has no business directing pensions savings above a level equivalent to the minimum income guarantee”.
The group also suggests employer compulsion should be implemented “as a last resort”.
It said this is a profoundly risky strategy for the government and best avoided.
The spokesman added: “With the Sandler and Pickering reports as a base, there is now a unique opportunity for the government, the financial services industry, employers and consumer groups to work together to promote a savings culture to help those on moderate and low incomes.”
Life expectancy in the UK saw no improvement between 2015 and 2017 as the number of people aged over 90 hit a record high, latest Office for National Statistics (ONS) data reveals.
Self-administered pension funds spent £14bn on payments to pensioners in Q2 2018, but only received £11.4bn of contributions (net of refunds), latest Office for National Statistics (ONS) data reveals.
The Pensions and Lifetime Savings Association (PLSA) has named the 17 members of its inaugural policy board after a competitive application process with 60 candidates.