Pension confusion leaves millions unsure if they’re saving enough | PLSA
Pension confusion leaves millions unsure if they’re saving enough

Pension confusion leaves millions unsure if they’re saving enough

05 July 2018
  • The PLSA finds 80% aren’t sure they’re saving the right amount for retirement
  • Half (51%) wrongly think the auto-enrolment minimum pension contribution level is the Government’s ‘recommended amount’
  • The PLSA is today setting out the recommendations of its ‘Hitting the Target’ consultation to help more people achieve the income they want in retirement

New research from the Pensions and Lifetime Savings Association (PLSA) reveals eight in ten (80%) aren’t confident they’re saving enough for retirement, equating to 30.4 million working age people who risk not being able to afford the lifestyle they want in later life.  

The findings are part of the PLSA’s new report - Hitting the Target: A Vision for Retirement Income Adequacy – which sets out the conclusions of a three month consultation designed to help everyone achieve a better income in retirement. Auto-enrolment has been a huge success in getting millions more saving into a pension, but people simply aren’t saving enough.

While a third (34%) say they could save more for retirement, it’s possible that uncertainty about how much income they’ll need is preventing people from doing so. The Government’s minimum auto-enrolment pension contribution level is currently 5%, increasing to 8% next year, and half (51%) wrongly believe this is the ‘recommended amount’ to save. More than four in ten (44%) assume the level has been set to ensure everyone will be comfortable in retirement when in fact it is only to ensure as many as possible have the minimum they need to live off.

With such widespread confusion among savers about the right amount to save and whether they’re on track, it’s clear more needs to be done to help people achieve the standard of living they want in later life. This includes finding ways to increase contributions as well as helping savers better understand pensions and plan for the future.

At present, half (51%) say they don’t have enough time to plan for the future, but 74% think retirement planning would be much easier if the UK had Retirement Income Targets, like the system currently used in Australia. Seven in ten (70%) even say targets would encourage them to save more, increasing to eight in ten (78%) millennials (18-34 year olds).  

Nigel Peaple, Director of Policy and Research at the PLSA, said: “Millions of savers are in the dark about whether they’re on track for the lifestyle they want in retirement. With future generations unlikely to have the same levels of property wealth, or final salary pensions, as current retirees do, it’s vital more is done to ensure people can cover the costs of later life. We want the Government, pensions sector, and regulators to work together to take forward our recommendations and help many more people achieve the retirement they desire.”

The PLSA is making a number of recommendations for change and these include:

  1. Introducing targets and increasing engagement: A package of measures is needed to improve savers’ engagement in pensions, including producing Retirement Income Targets that show the lifestyle someone could afford on different levels of income. The PLSA has commissioned independent researchers to develop these and will work with Government and industry on how these can be rolled out.
  2. Increasing pension savings: The Government should raise the minimum contribution levels for automatic enrolment from 8% of band earnings to 12% of total salary between 2025 and 2030, with at least 50% of this coming from employers to ensure it is affordable for savers.
  3. Increasing support at retirement: Pension schemes should signpost people to appropriate product options at retirement to ensure those who have difficulty making active decisions are still able to access a suitable, good value product.    
  4. Making it easier to use other income sources: It should be easier for people to supplement their retirement with income from borrowing against their home, and to keep working in later life, if they wish. The Single Financial Guidance Body’s guidance sessions should therefore both cover property assets and how a salary can supplement someone’s pension income.
  5. Improving how pension schemes are run: The pensions sector should develop a set of metrics to assess whether a scheme offers good value for money, and all schemes and providers should be well-governed and have a remit to support savers into retirement.

The Hitting the Target report can be read in full here.



Methodology: The PLSA commissioned Populus Data Solutions to undertake an omnibus poll of approximately 1,500 individuals aged 18 to State Pension Age (SPA) in the UK to examine attitudes towards saving for retirement. The poll was conducted between 30th  and 31st May 2018. Data has been weighted to be representative of the UK population.

The 30.4 million figure is calculated based on 39,953,458 people in the UK aged 18-65 (ONS), minus those that are retired based on our survey (4.8%), which leaves a total of 38,035,992 people non-retired, aged 18-65. 80% of this figure is 30.4 million.

The ‘Hitting the Target’ consultation was launched in October 2017 and ran for 12 weeks. More than 100 stakeholders from over 50 different organisations responded to the consultation. The PLSA’s vision for retirement income adequacy is:


Robyn Margetts, Head of Media and PR, Pensions and Lifetime Savings Association
T: 020 7601 1726, M: 07713 073023, E: [email protected]

Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007713, E: [email protected]


We’re the Pensions and Lifetime Savings Association; the national association with a ninety year history of helping pension professionals run better pension schemes. Our members include over 1,300 pension schemes with 20 million members and £1 trillion in assets, and over 400 businesses. They make us the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.

Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.

Navigate to ...