Cross-party approach on pensions needed

As the general election looms, leading audit, tax and consulting firm RSM UK is calling on the next government to take a cross-party approach to pensions. 

RSM’s head of pensions, Ian Bell said: 'Saving for retirement is a long game, yet the current approach, where pensions policy depends on who is in government, encourages short-termism. We’d like to see a cross-party working group established which would enable people to plan for retirement with greater certainty.

'Auto-enrolment is a great example of what can be achieved when all parties work together to address pensions issues. It’s been successful in ensuring the majority of workers save into a pension, however it doesn’t go far enough in terms of the amount saved. The current approach of automatically saving 8% of salary lulls workers into a false sense of security and means they often don’t stop to consider how much they should really be saving. Many are unaware that the 8% of salary saved into pensions under auto enrolment is unlikely to be enough to guarantee a comfortable retirement.

'We’d also like to see a commitment to better financial literacy, so younger generations understand that saving for retirement is not just an older person’s issue. Raising the 8% auto enrolment amount has already been acknowledged as necessary, however, as it’s unlikely to prove a vote winner, particularly in the current economic climate, no parties are addressing it directly in their manifestos.

'The current approach fails to recognise that we have a slow burning crisis building that will come back to haunt retirees and governments in years to come, unless all-party action is taken to resolve it.'