McFall launches inquiry into retirement saving

An independent Commission spearheaded by former Treasury Select Committee chairman Lord McFall will investigate why the pensions system is failing so many working people, and ask how the UK can radically change its approach to saving for retirement.

The Commission launch comes as a YouGov poll for the National Association of Pension Funds (NAPF) reveals that 84% say our society needs to rethink how it saves for its old age, while 79% say the UK needs a simpler pensions system.

The UK is facing a growing retirement crisis as people live longer but continue to save too little. Today’s poll also shows that 43% of people who aren’t retired say they cannot afford to save for retirement. And over half of those who aren’t retired (55%) are not confident they will have enough money in their old age.

Announcing the Commission Lord McFall said:

“Half the workforce is on a collision course with a long retirement spent in poverty. It’s unacceptable that so many will head into old age worried about how they are going to get by.

“A greyer Britain is one of the biggest challenges our society faces and there’s a huge gap in public policy which must be filled. We need to find a sustainable and more universal approach to saving for retirement.

“While the visionary proposals put forward by Lord Turner’s commission will get more people saving for their retirement from 2012, they are the beginning of the reform process, rather than the end.

“Even with auto-enrolment, up to nine million people risk being left behind, and we have to make it easier for everyone to save more. We will look at different types of pension and savings products, tax incentives, and the regulations faced by employers.

“And there’s a big question about whether those who do pay into a pension are saving enough, or are getting a good deal. If the system changed, could they get a better return?

“The Commission aims to shine a bright light on these issues. To understand the problems we will be reaching out very widely – not just to those in business and the pensions industry, but especially to people trying to save for their retirement.”

Lord McFall will chair the Workplace Retirement Income Commission (WRIC), which has been initiated by the NAPF. The Commission will be fully independent, and will seek out a wide range of views and research before making its findings public in October 2011.

The Commission’s final thoughts will be put to policymakers to help the Government meet its coalition agreement commitment to “reinvigorate occupational pensions”. The WRIC is not aiming to make recommendations about public sector pensions, which are being reviewed separately by Lord Hutton.

The five other members of the Commission bring a wealth of pensions, HR, analytical and business expertise:

• Graham Cole, currently Managing Director of major manufacturer AgustaWestland.
• John Hannett, General Secretary of Usdaw, the UK's fourth biggest union.
• Chris Hitchen, Chief Executive of pension service providers RPMI and former NAPF Chairman.
• Paul Johnson, Director of the Institute for Fiscal Studies, Britain's leading independent microeconomic research institute.
• Imelda Walsh, former HR director of Sainsbury’s and author of an independent review into extending the right to request flexible working.

The WRIC will focus on pensions and other workplace savings vehicles. It will ask what barriers to workplace retirement saving exist for both employers and staff, and explore ways of overcoming these.

It will question pension coverage and adequacy as well as the public’s trust and understanding. The Commission will also look at how pensions affect the UK’s competitiveness and labour market, and explore the wider macroeconomic role of the capital generated by pensions. The full consultation document can be seen here.

 

Notes to Editors

1. Survey figures are from YouGov Plc. Total sample size was 4177 adults. Fieldwork was undertaken between 21.01.11 - 24.01.11. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). The full questions and their responses are attached, or are available from the NAPF press office.

2. The NAPF will provide the secretarial and financial support to the WRIC. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,200 pension schemes with some 15 million members and assets of around £800 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
3. Learn more about the WRIC online at www.wricommission.org.uk/wric and follow the WRIC on Twitter, Facebook and LinkedIn.

Contact:

Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]

Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]