The Association of British Insurers has launched what it claims is the “first comprehensive review” of UK retirement needs, warning “radical reform” is needed.
The review will look at people’s financial needs in, and concerns about, retirement, how effectively the current state and retirement income products cater for retirement needs and what changes are needed to ensure adequate retirement incomes.
The ABI said the review has been launched as many people are facing challenges of paying for life in retirement.
The UK’s chronic under saving culture means many people face financial hardship in retirement.
The association flagged up that rising life expectancy means income is needed for longer.
The UK’s population is getting older – nearly 11m people in the UK are aged over 65, with this figure expected to rise by nearly 50 per cent to over 16m in the next 20 years.
The ABI said this brings increased pressure on the healthcare system and greater need to secure adequate income in retirement.
Government pension reforms, with the implementation of auto enrolment and changes to state pension age, are other issues facing the UK population as well as the growing demand for long-term care and how it can be paid for.
Of people aged 85 and over, 16 per cent will need to go into a care home, the ABI added.
Otto Thoresen, director general of the ABI, said: “How we pay for life after work is one of the key challenges facing our society, and the reason we have launched this wide-ranging review.
“Radical reform is needed to ensure people retiring today and future generations avoid a retirement of struggling to make ends meet.
“Reform has to be holistic. The pensions industry has a key role to play in meeting people’s changing retirement needs but we are part of a much bigger picture.
“This is why we are inviting views from far and wide, including consumer groups, charities, health support groups, pension experts, think-thanks, unions and politicians. Our focus will be on the needs of the retiree so we will be engaging with the public as well”.
The deadline for responses in 20 December.
Following submissions, the ABI will hold a series of workshops early in 2014 with key stakeholders, including consumer groups, to discuss issues raised.
A final report, including recommendations for reform, will be published in spring 2014.