Policy change needed to support Gen X savers

A policy solution is needed to help members of Generation X avoid a pensions crisis when they retire, according to B&CE, provider of The People’s Pension, director of policy and external affairs, Phil Brown.

Speaking at a Labour Party Conference fringe event, Brown raised concerns that “millions” could face a reduction of living standards in retirement, after previous research found that 61 per cent of households and nearly two thirds (63 per cent) of individuals aren’t saving enough for retirement.

This is despite nearly two thirds (62 per cent) of auto-enrolment savers who receive minimum contributions to their pensions believing that they are on course for a comfortable retirement.

Brown expressed particular concern for Generation X savers, aged between 42 and 57, pointing out that this group will have missed out on defined benefit pensions, with auto-enrolment introduced too late to make up for the shortfall.

Although Brown acknowledged that additional pensions might help, he argued that a policy approach is what is needed to help lessen this “impending crisis”, stressing that "there is no easy way forward".

He stated: “Getting to an adequate retirement income for this age cohort is likely to involve a combination downsizing the house, later working and perhaps increased saving in the time they have left.

"It’s important that policy makers begin thinking about this one now as it’s going to get harder to solve as the 2030s come around.

“As a pension provider, it’s not for us to make recommendations about levels of saving. It’s for politicians, employers and trade unions to reach a consensus on how pensions should be funded.

"We think, after the dust has settled from the current economic crisis, we need a new consensus and new adequacy objectives set for UK pension policy, so that we what outcomes pension policy is set to achieve for the average saver."

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