WPC launches inquiry into saving for later life

The Work and Pensions Committee (WPC) has launched the third and final part of its inquiry into the impact of the pension freedoms and protection of savers, focusing on what needs to be done to help people plan and save for retirement.

The inquiry, which will be hearing evidence until 2 February 2022, will consider whether households have adequate pension savings and how the government can improve member outcomes.

In particular, it will consider issues around auto-enrolment, retirement income targets and guidance and advice, as well as looking at the support available for self-employed workers and give economy workers, and the efforts needed to close the gender pension gap.

The WPC's inquiry into pension freedoms has previously considered the impact of pension freedoms on pension scams and the options and advice when accessing pensions, with the committee's recommendations from the latter to be published in the new year.

WPC chair, Stephen Timms, commented: “Making sure the right support and encouragement to save is in place from the very start of people’s working lives should be a key part of pensions policy if everyone is to benefit from a secure and comfortable retirement.

"Our inquiry will examine the impact on saving rates of both auto-enrolment and advice to savers and whether there are changes that could be made to boost the incomes of pensioners.

"With a rising number of people in precarious forms of work, the inquiry will also look at how self-employed people and those in the gig economy can be helped to save for their pensions to ensure they do not miss out later on in life.”

The final part of the inquiry also comes amid the launch of two new savings pilots from Nest Insight, which are designed specifically to support self-employed savers.

Indeed, commenting on the launch of the inquiry, Quilter head of retirement policy, Jon Greer, highlighted the self-employed as an under-pensioned group that is in particular need of "close attention".

"With the rise of the gig economy and self-employment, more and more see it as a way of improving their quality of life. But this comes at a cost to pension security through lack of access to auto enrolment schemes," he said.

“We know that many in the UK are at risk of having inadequate savings to fund their desired lifestyle in retirement. This is particularly true of under-pensioned groups, who are less likely to have private pension savings to supplement their state pension and indeed may not have any private pension saving at all.

“These groups are also those highly impacted by the pandemic. While the furlough scheme would have absorbed some of this financial impact, some people will still have made the decision to cease or reduce their pension contributions, or many well have changed jobs or become unemployed, which will disrupt contributions."

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