Hymans Robertson report: Risk sharing: an age old solution to the old age problem
The pensions industry needs to do more to support good retirement outcomes for defined contribution (DC) savers. Millions of people in the UK are heading towards retirements that are worse than their parents’ generation.
The Pensions and Lifetime Savings Association's Retirement Living Standards state that maintaining a moderate standard of living in retirement will cost c.£23k per annum.
But that target is currently out of reach for most. Nearly 20% of employees still don’t save into a pension at all, and only a small minority of the growing ranks of the self-employed are saving into a pension.
The DC generation is clearly in need of help. It’s not realistic to solve the problem with increasing contribution rates alone. The Financial Conduct Authority has highlighted the lack of product innovation. There should be a real onus on the pensions industry to promote solutions which help members extract more value from their DC savings.
While we need to rethink contributions, investments and delivering value for money, the focus of this paper from Hymans Robertson is risk sharing in retirement and how the various options might help DC savers, both in theory but also in practice.
We believe the pensions industry needs to do more to promote solutions which help members extract more value from their DC savings. We hope this paper encourages positive debate, so that together we help people make the most of their hard earned savings in retirement.
In partnership with Hymans Robertson
We're one of the longest established independent consulting and actuarial firms in the UK
