A pension dashboard and better signposting to advice are "crucial" to helping people save more for retirement, experts have claimed
A panel, hosted by the International Longevity Centre UK yesterday (March 2), looked at problems facing the Generation X cohort in retirement.
It followed the publication of 'Slipping through the cracks?', a 103-page report from the ILC UK, which suggested solutions to the current problem whereby one in three Gen Xers risk reaching retirement with inadequate incomes.
The panel, which also included FTAdviser senior editor Simoney Kyriakou, explored options to make pension saving more understandable, with information more readily available and accessible.
Speaking on the panel was Jonathan Reynolds, shadow secretary of state for work and pensions, who said: "For this generation, they have high expectations of consumer access and transparency... I don't think anyone thinks this situation is adequate at the moment.
"The dashboard has to be a fulcrum of the answer to this - certainly the answer to the small pots issue whereby people are doing a lot of jobs and having lots of small pots."
The ILCUK report found that a combination of exponentially rising house prices, low wage growth, high job uncertainty and a low availability of defined benefit pension schemes have combined to put pressure on those born between 1965 and 1980 in particular.
The report found even those GenX who are saving into a pension are often not putting enough into a pension to secure a liveable income in retirement.
Reynolds said: "Getting good advice to people at the right price is crucial; I also think robo-advice can play a much bigger role in financial advice, to signpost people into the kind of things they should be considering, and providing information to help them."
Reynolds also made a point around transparency, saying consumer information on pensions has to relate to climate change and sustainability, which was becoming more important to GenX and to subsequent generations.
According to the report, carers in particular face affordability barriers to saving, mainly because providing care – but also poor health – limits their ability to work. Paying for care costs also affects some carers.
The report said: "12 per cent of all our Gen Xers currently provide care to an adult every week, rising to 15 per cent of those aged 50 to 55.
"Carers may be considerably disadvantaged in retirement, with 56 per cent worried about their lifestyle in retirement."
The report also found care responsibilities negatively affect employment and that carers are significantly more likely to say they want to save more but struggle to do so than non-carers (67 per cent vs 56 per cent), mainly because they can’t afford to (56 per cent vs 49 per cent).
The report suggested: "Allow individuals to share their annual allowance for pension contributions with another person who is unable to contribute to their own pension, e.g. due to caring responsibilities or poor health".