A two-page call for evidence was issued a week ago by the trade body to gather views on how to address widespread reluctance to save towards retirement and shortcomings in the current system.
Otto Thoresen, director general of the ABI, said now was the time for more drastic action in the face of rising life expectancy, state pension changes and an increasing need for long-term care. He also acknowledged the organisation had to work more closely with the rest of the industry and the public to move forward.
He said: “Radical reform is needed to ensure that 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 pensioner so we will be engaging with the public as well.”
The trade body is also conducting a consumer survey to assess the public’s attitude to long-term savings, which can be accessed through its website.
The call for evidence will close on 20 December before the ABI discusses submissions with key stakeholders in early 2014. A report summarising the review’s findings and putting forward further recommendations is expected in spring 2014.
|Key areas to be looked at in review|
|- Fundamental changes to current system to make it work for the future|
|- Overseas models that could be applied to the UK|
|- Ways to redesign pension products to adapt to future demographics and social change|
|- Changes to rules and culture surrounding the sale of retirement income products|
|- How to make advice and information more widely available to consumers|
Adviser comment: Steven Robinson, managing director of Bristol-based Clarke Robinson & Co, said: “What we need is a time machine to go back and reverse the original decision to make workplace pensions optional in the 1980s. I think we should go back to compulsory pensions with the risk that some people might not be able to live sufficiently, but at least they will not completely fall back on the state past retirement.”