Pension reform after Covid-19

These jaw-dropping figures show just how much needs to be done to improve our current savings system and make it fit for purpose in modern times. 

Long before lockdown began, we had been calling for a single lifetime savings plan to be introduced that would have provided the flexibility savers so desperately need in these times of hardship.

This plan would be funded through an extension of auto-enrolment.

Our modelling predicts that, with higher contribution levels, savers would be able to withdraw up £1,000 from their plan on three occasions during moments of crisis and still be in a secure position for retirement. 

Plugging the gaps

We recognise that the next 12 to 18 months will be about helping Britain get back on its feet.

But, as the progress under auto-enrolment looks to have plateaued, we need to face up to the fact that our current system penalises certain cohorts of the population like young savers and those with multiple jobs. 

The government must take a long-overdue look at the current system and develop flexible and effective solutions to help these groups save for their futures.

Scrapping minimum earnings and enrolment age thresholds would allow millions more people access to a pensions system that is currently excluding them.

Pete Glancy is head of policy at Scottish Widows