Scottish Widows is calling for the establishment of a new Lifetime Savings Commission.
Scottish Widows says average pension savings are not enough for a modest retirement standard, highlighting the need for comprehensive retirement planning.
It argues that even though owning a home has been a retirement asset, the number of people owning their homes outright has dropped indicating a growing trend of rental income reliance.
Scottish Widows argues that ensuring that housing is affordable becomes crucial to the efficacy of national retirement schemes. It says that collaboration between different governmental organisations, financial institutions, and interested parties is necessary to resolve these issues.
The firm is urging for the establishment of a Lifetime Savings Commission to accomplish these objectives. This commission would handle a range of savings demands while boosting financial resilience and would be modelled after auto-enrolment.
Scottish Widows head of policy Pete Glancy says: “Pensions play a central role in financial planning for later life, but average pension savings levels are currently too low to provide for even a modest standard of living in retirement. Not everyone saves for retirement solely through their pension however, so it’s necessary to think about retirement and savings policy more holistically.
“For example, the greatest asset most people have is their home, and downsizing is a common feature of retirement strategies. However, the number of people expected to own their home outright when they reach retirement is reducing each year. This means that for many, most of their retirement income will go on rent, leaving little for other essentials. Housing is therefore necessarily a critical ingredient in any national roadmap towards good retirement outcomes.
“These challenges span the responsibilities of several different Government departments, and multiple sectors in financial services. To effect the necessary change building consensus on a way forward across political parties, employer bodies, consumer groups, and other important stakeholders, is vital. The Pensions Commission drove many positive changes including auto-enrolment, one of the most successful changes in pension policy in recent times.
“Looking at the challenges ahead, the time looks right to establish a broadly based and inclusive new Lifetime Savings Commission (a position that we have held for many years), mandated to consider how to equip our nations to meet full range of these diffuse and interdependent savings needs – as well as to improve our wider financial resilience.”
