To date, pensions have largely been absent from the financial inclusion debate, even though they are a major factor in ensuring people are financially and socially included in retirement. A large and worrying pattern of disparity in savings and outcomes is emerging, with 8.5 million people lacking any pension savings at all.
The Work and Pensions Select Committee call for evidence on protecting pension savers touches on several barriers to saving for retirement. The Commission was delighted to be invited to offer oral evidence to the Work and Pensions Select Committee on the topic of accessing pension savings this month. Commissioner Laurie Edmans spoke on 16 June alongside other pensions policy experts, emphasising the importance of having access to pensions advice or guidance earlier in life to help people on their pensions journey. You can watch a recording of the evidence session here.
Perhaps the most important issue to tackle is people’s ability to obtain guidance and advice. To overcome the disappointment many people feel when they reach retirement, they need to have a clearer picture of their retirement savings throughout their lives and the option to seek advice to make better financial judgements before it is too late. The Commission recommended better promotion of Pension Wise and an automatic enrolment into a Pension Wise interview throughout a person’s career, hopefully leading to an increase in the take-up of this vital resource.
Beyond better, more consistent advice or guidance, the Commission has also recommended a refresh of the Pensions Commission, bringing it up-to-date and into the 2020s. The last thorough review of the system took place nearly 20 years ago, and since then the problems have changed. It is time for the solutions and thinking to change too.
Pensions must be placed front and centre of any future strategy on financial inclusion, ensuring that retirement does not mean exclusion for millions.