UK Pension system review announced
The new Chancellor, Rachel Reeves, has launched a landmark review of the UK pension system with the aim of boosting investment and increasing pension pots. The announcement follows confirmation of a new Pension Schemes Bill in the King’s speech, which could boost pension pots by £11,000. The Chancellor says, “The review we are announcing is the latest in a big bang of reforms to unlock growth, boost investment and deliver savings for pensioners.”
The first stage of the review seeks to ensure pension funds are invested in ‘productive assets’, while the next phase, starting later this year, will look to find further steps to improve pension outcomes. Joint Treasury and DWP Minister Emma Reynolds says, “Over the next few months the review will focus on identifying any further actions to drive investment that could be taken forward in the Pension Schemes Bill before then exploring long-term challenges to ensure our pensions system is fit for the future.
“There is so much untapped potential in our pensions markets, with an industry worth around £2 trillion. The measures we have already set out in our Pension Schemes Bill will help drive higher investment and a better deal for our future pensioners.”
‘Sleepwalking’ into retirement crisis
The announcement comes as welcome news, as new research published in July found that almost 40% of people face being unable to fund a minimal lifestyle in retirement – defined by the Pension Livings Standards Association (PLSA) as £14,400 a year for a single person or £22,400 a year for a couple. This figure has grown 3% in just a year – equating to an extra 1.2 million people. The report also found that:
- 66% of people do not think they are preparing adequately
- 54% expect to retire later than they would like to, 7 years on average
- 75% of current retirees say that the State Pension helps them pay for essentials, but 12% don’t believe it will be around for them at retirement
Getting started with pension savings
Moneybox makes it easy to save for retirement your way, whether that’s with a monthly Payday boost, a weekly deposit, or using our OG round ups – which allows you to round up your everyday purchases to the nearest pound and invest the change.
When it comes to pension savings, even small amounts set aside now have the potential to grow into something greater in your future, thanks to compound interest. Get started today with a Moneybox Pension.
As with all investing, the value of your pension can go up and down, and you may get back less than you invest. Pension & tax rules apply.