We are all living longer and, for the most part healthier, lives. This is something that should be welcomed. But it places strains on younger and future generations. The under-35s have suffered a double whammy of a fall in average incomes and the rising cost of housing, energy and transport. They spend more of their income on these necessities of life than any other age group and will receive less generous pensions than their parents. No wonder they are finding it difficult to save.
This means that low-income levels in retirement is set to accelerate between 2045 and 2060 as a second baby boom of up to 12m consumers retire. They are going to live for longer, but may experience financial hardship when they end their working lives. The project’s initial objective is to drive the issue of saving further up the political and economic agenda.
As Anthony Hilton recently wrote: “A savings culture is an ecosystem not a machine. Like a plant, it can survive all sorts of ill treatment – too much heat, too little water, bad soil, foolish pruning, an excessive dose of fertiliser. But if you mistreat it long enough, one day it will simply die.”
This is a significant initiative by the industry to get all interested parties involved in an issue that affects all our futures. People have to realise that they have to take responsibility for their own financial security, but we as an industry have to do better. We have to be more transparent, we have to eradicate unnecessary complexity and we need to listen to our customers if we are to secure their confidence and trust, and get them saving for the future. If we want to see a sustainable recovery in this country, it is saving that will get us there.
Tony Vine Lott is director general of Tisa