Are you saving for retirement?
The likelihood of younger generations having a comfortable amount of savings to fall back on in retirement is disconcertingly low.
The consensus is that young people just aren't saving and rely heavily on their pension to provide an income when they get older. Generally, this isn't enough.
Auto-enrolment in pension schemes has led to a rise in workers having a safety net for retirement. In 2016, 78% of eligible employees were enrolled in a workplace pension, up from just 55% in 2012. The Pensions and Lifetime Savings Association (PLSA) report around half of millennials (18 to 35-year-olds) are saving into a pension and almost the same number also have other savings for later life.
However, while this is good news overall, it is estimated that people need a minimum of 70% of their current income to sustain them comfortably in their twilight years and research from Aon has suggested that most members of a direct contribution pension scheme will be £1,400 a year short upon retiring.
In an interview with the BBC's Business Daily podcast, behavioural economist Dan Ariely emphasises the importance of starting to save as early as possible and offers some practical advice.
The ICAS thought leadership initiative, Challenging Conversations, details the challenges and issues around important topics - such as Pensions.
Challenging Conversations creates a platform for debate on these important issues, among CAs, with industry and policy makers to tackle the big issues facing society.
The next Challenging Conversations event takes place in London on Tuesday 11 September, when an expert panel including Gregg McClymont and Josephine Cumbo, Pensions Correspondent at the Financial Times will debate: “What steps could be taken by the political establishment to make pensions policy fit for the future?”