The Savings and Investment Policy Project, created by an unprecedented industry grouping of leaders from across the UK’s financial services sector, has published a report indicating that the UK is not saving enough to cover day-to-day needs and that, by 2035, a point will be reached whereby succeeding generations of pensioners will be worse off than their predecessors.
However, the Savings and Investment Policy Project does believe that there is an opportunity to change attitudes towards saving and create new policies to avert the looming social and economic crisis.
The recent Budget reforms, giving more flexibility and choice, have been welcomed, but the Project has warned that the issue of people not saving early enough has yet to be addressed.
The Project wants to foster debate and discussion around the importance of saving to ensure a secure financial future for individuals, as well as proving beneficial for the prosperity of the UK as a whole.
In addition, the Project intends to develop policies to help rebuild confidence in long term savings, and will be ready to share its policies with the political parties in September of this year.
Paul Feeney, chief executive officer of Old Mutual Wealth, explained that in 1967 over 8m people personally saved for their retirement, but by 2011 that number had slumped to just 2.9m.
Feeney described initiatives such as the Savings and Investment Policy Project as essential to helping industry collaborate with others to develop plans that will reverse the downward trend in saving for retirement.
Feeney went on to say that the recent Budget announcements were likely to result in much greater flexibility for people entering retirement, and said that it was crucial for industry to work together to ensure that the public’s awareness regarding their retirement savings options is raised.