- Four in ten people retiring this decade will not have ‘enough’ income
- New data shows 5.6 million people will not be able to save enough over the next 20 years
Two million Britons retiring this decade are set to be hit by ‘inadequate’ pension pots – rising to 3.6 million in the 2030s, new government figures suggest.
The Department for Work and Pensions today released an analysis of future pension income, which shows that 5.6 million English, Scottish and Welsh people are not saving enough for their pension.
Four in ten of the 5 million people set to retire in 2020 are not expected to have ‘enough’ income after housing costs to maintain their standard of living.
And that figure is projected to rise to 44% for 2030 and 2040, before falling to 36% and 33% in the 2050s and 2060s, respectively, according to DWP data.
In the 2040s and 2050s, 2.8 million people will not have enough pension income to cover housing costs. And it is projected to fall to 2 million in 2060.
DWP analysis shows that 13 million (39%) of those aged 22 at the state-pension age (currently 66 but set to rise to 68) are unable to properly maintain their standard of living after housing costs in retirement Not saving enough for
And a total of 4.1 million (12%) working-age people are not saving enough to meet a minimum level of pension income needed to retire.
In this decade, 800,000 people (14%) are not expected to meet the minimum standard of pension income, rising to 1.1 million (13%) in the 2030s.
In the 2040s, forecasts say 900,000 (13%) will not meet the minimum income level – with a similar level (though a lower rate of 11%) in the 2050s, before falling to 600,000 (10%) 2060.
The revelation came as the DWP announced this evening that the low earnings threshold for automatic enrollment into company pension schemes would be scrapped, and the age limit would be reduced from 22 to 18, as the government approved a private member scheme. supported the bill. By Tory MP Jonathan Gullis.
The department said lowering the auto-enrolment age to 18 would ‘set the standard for savings for young adults and enable them to save from the start of their working lives’.
He said removing the low-earnings cap would ‘help people on low earnings and in multiple jobs to make sure they are saving from the first pound they earn’.
Pensions Minister, Laura Trott, said: ‘We know these widely supported measures will make a meaningful difference to people’s pension savings for years to come.
‘In doing so the Government will fulfill our commitment to help grow the economy and support the hard working people of this country, particularly women, young people and low earners who have historically spent more time on retirement. Has found it difficult to save.
Jonathan Gullis MP said: ‘Pension auto-enrolment will benefit young people in all four corners of the country, which is why I am delighted that Pensions Minister Laura Trott is supporting the Bill.
‘With all the evidence of its enormous positive impact, it is a no-brainer that we now need to extend auto-enrolment to those aged 18 and over. I am sure this bill will make a huge difference to the people from Kidsgrove to Consett.