James Smith and Alexandra Miles authored the paper: 'Retirement reimagined: Securing lifelong financial independence for all'
The UK’s retirement system is built on outdated assumptions leading to millions of people “falling short of dignity in retirement”, an Association of Consulting Actuaries (ACA) report says.
The report – Retirement reimagined: Securing lifelong financial independence for all – was authored by actuaries James Smith and Alexandra Miles and follows the inaugural Bloomfield ‘Bow Tie' Lecture last year, where the pair outlined some of the same themes.
In their paper, Smith and Miles said the era of people retiring at 65, living modestly for a decade, with state and workplace pensions sufficing, was over – noting that today brings longer lives, rising inequality, insecure housing, and fragmented savings, with millions working hard all their lives, yet falling short of dignity in retirement.
To solve some of these challenges, the report proposed a restructured state pension with means-tested later-life supplements – a move that could potentially save up to £34bn a year.
It also put forward a plan for a universal employment pension (UEP), alongside the reformed state pension, to guarantee a basic income indexed to a minimum income standard (MIS).
The paper also said the use of existing infrastructure and evolving regulation – like the National Wealth Fund and multi-employer collective defined contribution (CDC) rules – could align pensions with UK growth, unlocking up to £25bn a year.
And it said default sidecar saving would boost today's resilience and tomorrow's security, without harming retirement outcomes.
The case studies the report explores, alongside existing data, reveals what it said is a "stark truth" – those who need most often get least. It said homeownership now drives financial security more than income – adding that renters and women face significantly higher retirement shortfalls in order to meet the same objective of dignity in retirement.
Commenting on the report's publication, Smith said: "Our retirement system remains tied to rigid thresholds and averages, failing to reflect real lives. This report reimagines retirement across four phases: the phase-in, the white-linen years, the television years, and the increased dependency years. Each builds on the last and is rooted in delivering financial security before enabling financial ability, flexibility and contingency."
Miles added: "The recommendations in our report are focussed on securing dignity for all in retirement, and preparing for 100-year lives. But we are clear that achieving reform cannot rest solely with individuals. Employers and the state must step up, with systems fit for modern life, not Victorian ideals. Lifelong financial independence shouldn't be a privilege. It should be a right."
Welcoming the report, ACA chair Stewart Hastie added: "Both the lecture and the report look to the huge challenges we face as a society both today and more so in the years ahead. Unrestrained by the kind of restrictions government tends to apply to reviews, whilst the report's proposals are not ACA policy, we warmly welcome the refreshing ideas that have emerged."
Miles and Smith will be hosting a Chatham House-style event in mid-November in central London to continue the conversation and build on the ideas set out in the report. Register your interest to attend the event here.
James Smith is a senior DC consultant at Hymans Robertson. Alexandra Miles is a senior DC fund manager at Legal & General and also a chair of both the Pensions Gap Working Party and Ageing Populations Working Party at the Institute and Faculty of Actuaries.
The ACA's Bloomfield Bow Tie Lecture was set up to commemorate the untimely passing of the organisation's former chair, Patrick Bloomfield, in 2023. The inaugural lecture was held on 6 November 2024.
