Pension policy experts have generally welcomed the independent Cridland Review on retirement and pensions policy-making as life expectancy increases.
Director of long-term savings and protection policy for the Association of British Insurers, Yvonne Braun, commented: “Our society has to adjust to the fact that people are, on average, living much longer, and the Cridland Review makes many thoughtful recommendations.” Braun added that the ABI supported the idea of a mid-life MOT, to help people plan their later lives, and it agreed that the pensions dashboard, which will aggregate state and private pension information, could play a role in doing this.
Now Pensions director of policy, Adrian Boulding, said that pension contributions will need to increase for many if they are going to be able to retire before reaching the state pension age, which could rise to 70. Boulding said research showed that nearly half of UK adults want to retire by the age of 61, and 41% don’t want to work in later life but think that they will have to for financial reasons.
Fidelity International said it broadly supported the Cridland Review’s recommendations, which give a clear timeline for state pension age rises and recommends scrapping the pension triple lock. But it also said that increased contributions, through higher auto-enrolment contribution rates and other means, would be needed to help many, especially the less wealthy, and ill people who could be unable to access the state pension early. Fidelity International head of pensions policy, Richard Parkin, commented: “While the triple lock was a useful policy for lifting pensioner incomes from a very low base, it seems fiscally unsustainable and the step change in incomes delivered by the new state pension has made its purpose less clear.”
Parkin added that two issues stood out as not being addressed by the review. One is that the growing ratio of retired people to the working population will lead to a heavier burden on the latter group in the future. The second issue is for the less wealthy or those in ill health without access to the state pension early in future. “We do need to ensure that automatic enrolment is expanded to cover these people. While this may not generate a lot of extra income, it can provide some bridging income between when they have to stop work and when the state pension becomes payable,” Parkin said.