Today, the government has announced the launch of a new Pensions
Commission, examining the adequacy of retirement incomes for
future pensioners.
This focus is welcome given the findings of our own recently
published Pensions Review, which
highlights that millions of today's workers are on track for an
income in retirement that falls well short of the standard of
living achieved during working life. Policy action is therefore
needed to improve the retirement income prospects of both
employees and the self-employed, while taking care to minimise
any falls in take-home pay among those who can least afford them.
The final recommendations from the IFS Pensions Review, published
on 2nd July, provide a new blueprint to help achieve these goals,
and should inform the new Commission.
Laurence O'Brien, a Senior Research Economist at IFS and
an author of the briefing, said:
‘Despite the success of automatic enrolment in increasing the
share of employees saving in a workplace pension, our recent
research has shown that, among employees saving in a defined
contribution pension, almost seven million appear on course for a
disappointing income when they reach retirement. Alongside this,
only one in five self-employed workers are currently saving in a
pension. In the face of these trends, the launch of a new
Pensions Commission, focusing on the adequacy of retirement
incomes is welcome. However, any reforms to boost pension saving
must be carefully targeted to minimise falls in take-home pay
among those who can least afford them.'
The briefing is available to
read here on the IFS website
