As the Association of British Insurers (ABI) launch a “comprehensive review” of the UK’s retirement needs, it warns that radical reform is needed.
We know people are living longer, and that’s a fairly non-negotiable trend, meaning more money is needed for more years in retirement, not to mention more pressure in healthcare needs. This is emerging alongside a growing under-saving culture, which is routinely blamed for great sections of the population reaching retirement age without enough money to live on.
But when wages are stagnating to the extent to which we are currently seeing, where are these savings supposed to come from? At a time when people are returning tinned goods to food banks because they can’t afford the energy to heat it, and an economically developed country has to run appeals for donating children’s winter coats, how ethically sound is it to spin the situation as an under-saving culture?
Savings surely have to come from a surplus of income, and represent the leftovers of a salary once all the essentials have been taken away. But as the cost of living is getting higher and higher, what is left for saving?
Reports are regularly published showing unquestionable figures about women not saving enough for their retirement, often with the spin of “women prefer to spend money on holidays”. This so often goes unexamined, and leaves women looking irresponsible and frivolous. When we’re a culture that expects women to do the majority of the child-rearing and then penalises them when they try to re-enter the workforce, it is unsurprising that many of them are unable to save adequately for retirement, or for anything.
While the ABI is not wrong to estimate that radical reform is needed, it seems to me as if it didn’t anticipate quite how deep and radical it would need to be. It is all very well trying to change public psychology around saving– just make sure they have the means to do it in the first place.