IFS Retirement Savings Consortium Report

Commenting on the Institute of Fiscal Studies Retirement Savings Consortium’s Report, Calum Cooper, Head of Pension Policy Innovation, Hymans Robertson (member of the consortium), says:

“This is a timely and valuable report from the Institute for Fiscal Studies’ Retirement Savings Consortium. Automatic enrolment (AE) has been a huge success. It’s brought millions more people into pension saving. However, that participation is not the same as adequacy and this report tackles that challenge head-on. The report also highlights an important employer reality. The impact of reform will not land evenly. Employers have just absorbed higher National Insurance costs and many are already planning for future salary sacrifice changes. At the same time, productivity growth remains weak and economic uncertainty is high. Against that backdrop, employers will want to understand how any increase in minimum contributions affects their workforce, pay profile and business model. For some sectors, especially those with large numbers of lower-paid or minimum wage workers, there are simply fewer levers to pull. The IFS scenarios provide a useful framework for that kind of planning."

Commenting on the impact for employers of the findings in the IFS Retirement Savings Consortium’s Report, Hannah English, Head of DC Corporate, Hymans Robertson (member of the consortium), says:

“From an employer perspective, the how matters as much as the how much. A clear roadmap will be vital. Long lead times and gradual escalation will be essential. Reform must also be simple to operate as complexity creates cost, compliance risk and confusion. Employers are more likely to engage positively if the direction of travel is clear and the system is hard to get wrong. Most importantly, adequacy is not just a pensions issue. It is a workforce issue. Better pensions can support financial resilience, workforce planning and productivity. They help people make better decisions about when and how they retire. Higher contributions are likely to be part of the solution, but they are not the whole answer. Every pound saved needs to work harder through strong value for money, effective investment and better retirement support. There’s no cost-free route to higher retirement incomes. This report from the IFS makes it clear that the question for the Second Pensions Commission is how to improve outcomes while balancing affordability for workers, employers and the Exchequer. If pension reform gets those things right, it can become a success not just for savers, but for employers and the wider economy too.”

Important information

This communication is based upon our understanding of events as at the date of publication. It is a general summary of topical matters and should not be regarded as financial advice. It should not be considered a substitute for professional advice on specific circumstances and objectives. Where this page refers to legal matters please note that Hymans Robertson LLP is not qualified to provide legal opinion and therefore you may wish to obtain independent legal advice to consider any relevant law and/or regulation. Please read our Terms of Use - Hymans Robertson.