The Society of Pension Professional has called for the Pensions Commission to set out a clear timetable for increasing auto-enrolment contributions to give certainty to both employers and employees.
Alongside this framework, the body is also calling for AE to be extended to the self-employed, pension credit paid to carers, and non-taxpayers allowed to save more into pensions.
The paper also encourages the Commission to look beyond pensions to explore how wider lifetime saving could be improved through the integration of short term and long-term savings schemes.
It says this could be achieved through alternative architecture such as expanding the list of authorised benefits provided by pension schemes — which might include long-term care and medical support for critical illness — as well as promoting the delivery of CDC pension schemes.
These various measures are contained in its latest research paper: Saving Retirement: who is at risk and why?, which sets out the issues it believes the Pensions Commission should tackle in a bid to improve pensions adequacy in the UK.
The paper lays out the first steps it thinks the Commission to take, which include producing a clearer definition of ‘adequate’ in relation to retirement income; identifying the under pensioned; a better understanding the trade-off between adequate living and adequate saving; and improving public trust in and awareness of state provision.
The paper also explores how disenfranchised groups could be better supported, and suggests making changes to help boost the pensions of the self-employed and carers. As well as extending AE to the self-employed it says it would like the Commission to explore the practicalities of introducing a carer’s credit to help the 2.3m people working as carers who currently receive no income and therefore cannot make pension contributions.
In relation to AE contributions, the paper states, “The Commission should set out a long-term plan for increasing auto-enrolment contribution rates, including a clear framework and timetable, which provides certainty for savers and employers alike, to reach an adequate level of contributions.”
SPP president Sophia Singleton says: “The SPP hopes that this wide-ranging paper proves useful in stimulating debate, thought and most importantly, action, on what is arguably the biggest pensions challenge faced to date. As the paper makes clear, Government, industry and savers can all do more, and we all need to if we are to achieve the shared goal of an adequate retirement income for all.”