In a report published today by the International Longevity Centre-UK, sponsored by Prudential, it said that retirement planning was made more difficult due to constant policy changes.
Uncertainty was also compounded by falling real incomes and low investment returns.
The think tank also said that demographic changes were having a deep impact, citing that in 2012 women stopped working at age 63 (on average), leading to the need to fund 26 years in retirement. Men will need to fund 21 years.
It argued for a new Pensions Commission to take a “holistic, non-partisan view of pensions policy” and to make “well-informed decisions on the basis of strong evidence and widespread consensus”.
The central aim would be to help savers secure income adequacy in retirement, with the following remit:
- Define target outcomes for retirement savings and extending working lives.
- Monitor progress against these targets.
- Consult and ultimately decide on whether new policy reforms are needed.
The report argued for its establishment as soon as possible after the general election but that “in order to allow the current set of reforms to bed-in and to ensure at least short to medium term stability in pensions policy, the Commission should not set out any final proposals until 2017 at the earliest”.
Tim Fassam, head of public affairs at Prudential said recent changes had expanded the number of people saving and provided a wider range of choices in retirement.
“While these are important improvements, most people are still not saving enough to provide the retirement they desire. Pension decisions are long-term, so stability and predictability are important in encouraging people to save more”, he said.