The UK continues to fall short of adequate retirement saving. Redington's Rob Gardner proposes a five-step plan to get the British public back on track.

If we are to achieve long-term sustainable retirement provision, policy needs to be aligned with long-term objectives rather than short-term vote-winning.

There have been calls from some quarters for the new pensions minister, Ros Altmann, to consolidate the changes made under Steve Webb and his predecessors and resist radical reform. Yet affordability of pensions is one of the UK’s biggest challenges.

Our population is ageing, fertility rates are decreasing and the government is already heavily in debt. Let's ask the tough question – who will pay for future provision?

According to a 2013 European demographic research report by Amlan Roy at Credit Suisse, health and pension expenditures are projected to grow close to 20 per cent of GDP. This is unsustainable.

This is a collective problem for individuals, companies and government; it should be in our mutual interest to solve it

The government not only has to support a larger group of retirees – baby-boomers entering retirement – but it also has to support them for a longer amount of time.

This has both immediate and long-lasting consequences on health care, long-term care and the pensions expenditures of governments.

We all want a certain and comfortable retirement, but the majority of us do not want to adapt to disciplined saving.

Why not? Are we unsure about what we want, or do we lack the culture and collective mindset to overcome our need for short-term gratification? 

This is a collective problem for individuals, companies and government; it should be in our mutual interest to solve it.

Only a few nations embrace the ‘save today to finance a better tomorrow’ culture. These include Norway and Singapore: nations that exemplify long-term financial planning and thinking. 

With this in mind, I have set out a five-point plan for a healthier financial future, with the aim of fuelling further policy debate.

  1. Implement a far-reaching financial education programme to build the financial capability of our children who will become tomorrow’s workforce;

  2. Deliver a simplified tax system that is fair for all;

  3. Establish a 15 per cent national savings target. Auto-enrolment is a step forward, but even the 2018 auto-enrolment figure is merely poverty prevention;

  4. Install an independent pensions commission with the power to make real decisions, free from political interference, akin to the Bank of England;

  5. Set out safe-harbour guidelines encouraging companies to educate and inform their workforce on how to take responsibility for financing their financial freedom. 

Robert Gardner is co-CEO at Redington

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