Britain is ‘sleepwalking towards a pensions crisis’ after Labour indefinitely delayed a review of auto-enrolment, the boss of Standard Life has warned.
Andy Curran, chief executive of the life assurance and pensions giant, said the minimum savings level of 8 per cent through the scheme is ‘simply not enough for most to achieve an adequate retirement income’.
Concern has escalated in the industry after a promised government review of auto-enrolment was kicked into the long grass late last year.
Standard Life is one of the UK’s leading pension firms with 12million customers.
Writing in the Mail, Curran said: ‘The UK is sleepwalking towards a pensions crisis hidden in plain sight and is less than two decades from reaching boiling point.’
He said millions risk falling short of an adequate retirement income unless action is taken to increase the amount they are saving.
Shortfall: Andy Curran, chief exec of life assurance and pensions giant Standard Life, said the minimum savings level of 8% through the scheme is ‘simply not enough’
He added: ‘We can’t just let it be a problem for tomorrow because we have been doing that for far too long already.’
And he said he hoped it was not the case that reforms have been put ‘on ice’ adding: ‘We need this review to happen as soon as possible.’
Auto-enrolment was introduced in 2012 and has been credited with encouraging millions of savers to put aside money for their retirement.
The minimum contribution stands at 8 per cent of earnings, with 3 per cent coming from employers. The level has not changed since 2019.
Chancellor Rachel Reeves was reported to have blocked a review into possibly increasing it amid concern that it would place a further burden on businesses already battered by her Budget. Government sources insist the pensions review will happen but no date has been given.
Research from Phoenix Insights – part of Standard Life’s parent company Phoenix – suggests that as many as 17m adults are not saving enough.
This trend is expected to worsen over coming years, with most savers retiring on defined contribution schemes doing so with less income than they need – hitting a peak in the early 2040s.
Curran said that increasing contributions from 8 per cent to 12 per cent in the UK would mean a typical 18 year old would have an additional £96,000 in their pension pot at state pension age.
A Government spokesman said: ‘We are determined to ensure that tomorrow’s pensioners are supported, which is why the Government announced the landmark two-stage Pensions Review days after coming into office.’
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