The Institute of Fiscal Studies is exploring the key challenges threatening living standards in retirement.
Among these challenges, as highlighted in the opening report of the IFS review, are the facts that:
- around 3.5 million people working in the private sector do not make any pension savings in a given year
- 61% of middle-earning private-sector employees who contribute to a pension are saving less than 8% of their earnings
- 87% save less than the 15% recommended by Lord Turner’s Pensions Commission.
The IFS also warns that demographic and other pressures mean government spending on state pensions and pensioner benefits is already projected to rise by £100bn a year by 2070 – on top of even bigger increases in health and social care spending.
Its review will focus on whether people are saving appropriately for retirement, in terms of both amount and form, as well as how government policies can help. It will also consider whether the state should support people from late working life into and through retirement. A third theme will look at whether people need more help to use their wealth appropriately during retirement.
A major report from the project is expected this autumn, with specific policy recommendations and options to be published in a final report scheduled for summer 2025.
