To find out more about the "Death of retirement" download the full policy paper.
The contribution level set by the Government is much lower than that paid into Defined Benefit and Defined Contribution schemes in the past. Whilst the average contribution rate into an old-style final salary pension was around 20% of total wages, the statutory minimum for a new automatic enrolment scheme will not reach 8% until 2018.
Unless today's workers begin to save significantly more for their later life, many will find that the quality of later life enjoyed by their parents will be out of reach unless they work well beyond traditional retirement ages. For many people, continuing to work to these much higher ages may simply be beyond their physical capability. Without significantly higher levels of engagement in pensions, we may be witnessing the 'death of retirement.'
It is great news that millions more workers are being enrolled into workplace pensions, but the amounts going in are simply not enough to give people the kind of retirement they would want for themselves, and certainly not the sort of pensions that many of those retiring now are enjoying.