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ABI New thinking is needed to meet the retirement needs of Generations Y and Z

Retirement 2050 think piece published today to kick start debate about how pension reform works in practice

ABI Retirement 2050 coverPolicymakers should look further ahead than the baby boomers and think about how Generations Y and Z can be helped to save and build a decent retirement a new ABI report says today.

Written by Director of Long Term Savings Yvonne Braun, Retirement 2050 draws on international experience to start debate about ideas for reform to benefit future generations of retirees.

Published in the week of the ABI’s Retirement Conference the think piece aims to encourage a discussion about longer term challenges. With new pension reforms going live in April, there has been an understandable focus on people at retirement age.

However, Generations Y and Z, those born after 1980, will not have the assets of their parents or grandparents. They will be navigating a very different set of retirement challenges and we need to plan now for the best way to ensure the reforms also work for those saving now.

Read the report: Retirement 2050 - Identifying the challenges of a changing world (pdf 3MB)

Yvonne Braun said:

"There has been a lot of discussion about people retiring today, but we must not stop thinking about and planning for the needs of those retiring in the future. 2050 feels like a long time away, particularly when we think about how short our political cycles are, but building a decent retirement income is a long-term process and we cannot leave future generations to fend for themselves. After all, those retiring in 2050 are already 35 today.

"We want to start a debate about how we move beyond today's baby boomers challenge and start meeting the longer-term needs of Generations Y and Z who simply will not have the assets of their parents, and will need different solutions to their retirement challenges.”

Retirement 2050 is a think piece which poses questions for discussion about the challenges future generations will face in saving and getting the most out of their money at retirement:

Keeping retirement savings relevant – we should explore:

  • The pros and cons of allowing people to access their pension savings to fund a deposit for their first home, especially for generations Y and Z
  • Restructuring tax relief so that people on low to middle incomes are more encouraged to save

Policy development for the ageing society – we should explore:

  • Taking the politics out of pensions, through an Independent Retirement Commission, providing analysis and shaping a national long-term savings strategy, so that the implications of an ageing society are assessed holistically

Extending the reach of the pension reforms – we should explore:

  • Introducing auto-escalation, so that people’s pension contributions rise upon receiving a pay rise
  • How best to reach the growing population of self-employed people

Delivering good retirement outcomes – we should explore:

  • The pros and cons of default retirement income products or advice to make sure people who don’t engage with their decisions still get a good outcome
  • Giving people an overview of all their savings in one place on-line, including the State Pension, so that they have a clear sense of what their preparation for retirement looks like

Discuss these issues using the hashtag #ABIRetirement.

Last updated 01/07/2016