Joanne Segars: Moving from pensions to alternative retirement vehicles
With the current economic, legislative and social pressures being faced by all, a comprehensive look at how people approach lifetime savings is helpful.
The UK has a strong history of providing employees with a workplace pension and we believe that while other company-sponsored savings vehicles have a role to play, we still need to focus our attention on ensuring everyone, but especially young people, are saving adequately for their retirement.
Young employees’ contributions will have the greatest length of time to benefit from the effects of investment growth and help secure a decent income in retirement. Auto-enrolment is vital to achieving this and with opt-out levels lowest amongst the under 30s (7%), it’s clear young people are realising the importance of a workplace pension in their long-term savings plan.
Saving for long-term ‘not always possible’
When we conducted research amongst 18-35 year olds, we found 51% of them get more satisfaction from saving money than spending it but short-terms costs such as rent, the general cost of living and low salaries means saving for the long-term isn’t always possible. So, while more needs to be done to ensure young people save for their retirement, everybody, regardless of their age, needs to ensure they have enough money to live a comfortable life once they’ve finished working.
Pensions highly prized
For most people a workplace pension is the best way to make that happen. Employees value a savings product in the workplace and a workplace pension has for many years been at the heart of that. While there are many flexible benefits to choose from, auto-enrolment’s popularity shows that a workplace pension is still a savings vehicle that many employees prize highly.
Joanne Segars is chief executive of the Pensions and Lifetime Savings Association
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