Retirement Income Summit – what do we need to do to ensure everyone has a decent income in retirement?
- Increase the state pension age sooner rather than later?
- Let AI deliver advice?
- Support a “living pension”?
- Replace the state pension with a Universal Basic Income?
- Auto-enrol gig economy workers into long term savings?
So, what are the right answers? While not always easy, it’s imperative for Government and industry to address such critical retirement planning and income challenges faced by our society and have that all important public debate about the necessary trade-offs.
The International Longevity Centre UK’s (ILC) Retirement Income Summit, hosted by M&G and supported by Canada Life, will bring together key policymakers and experts to shape and propose innovative recommendations for the next Government to action so more people have access to a decent income in retirement.
At the event, to be held on 13 June, the ILC will also be launching early findings from new research, supported by M&G, which will explore the role of the pensions industry in addressing intergenerational inequalities as wealth increasingly sits with older people. Recent ILC research has highlighted that in 2010, those under 40 held £7.53 of every £100 of wealth. Over the last decade this has fallen significantly to only £3.98
Over the past decade, auto-enrolment into pensions has helped millions more people save for their old age. But the amounts being saved are likely to remain inadequate for many, and with the cost of living rising, this will also have a significant negative impact.
According to latest figures from the Financial Conduct Authority, between May 2022 to January 2023, more than half (56%) of UK adults stopped saving or investing, had reduced how much they were saving or had used their savings to meet their daily expenses, due to the rising cost of living. This equated to 29.4 million people.
In addition:
- The UK’s 14 million Gen Xers save just £200 into their pension pots each month on average – one-third of this group are at high risk of retiring on insufficient income;
- There are 9.2 million economically inactive adults aged under 65: over 2.8 million of them are long-term sick, while others are forced to leave the workforce earlier than planned due to caring responsibilities; and
- More people are renting, with the number of private renters aged 65 and over projected to double by 2046 to 12% of all households in this age group.
We also need the next Government to focus on the challenges not just facing people in retirement but younger people. It is increasingly difficult for younger people to save as they face increased housing costs, precarious salaries, and wage stagnation. People aged under 40 hold just 4% of the UK’s wealth, which means we need to make – and take – the brave decisions now to benefit the generations to come.
The ILC’s Retirement Income Summit will consider the bold changes Government and industry need to drive over the next decade.
Speakers confirmed so far include:
- Professor Jo Blanden, Professor in Economics, University of Surrey
- Molly Broome, Economist, Resolution Foundation
- Nida Broughton, co-Director of Economic Policy, Behavioural Insights Team
- Jonathan Cribb, Associate Director and Head of Retirement, Savings, and Ageing, Institute of Fiscal Studies
- Fiona Dunsire, UK Government Actuary, Government Actuary’s Department
- Joanne Elson CBE – Chief Executive Officer, Independent Age
- Steve Groves – Chair, Key Retirement Group
- Tish Hanifan – Founder and Joint Chair of the Society of Later life Advisers
- Nadia Isgiz, Project Manager – Living Pension, Living Wage Foundation
- Mick McAteer – Co-Director, The Financial Inclusion Centre
- Sir Stephen Timms MP – Chair, Work & Pensions Committee
Full speaker biographies can be viewed here.
The event will be held at M&G’s offices in London on Thursday, 13 June. To register, go to: https://ilcuk.org.uk/retirement-income-summit-2024/
Clive Bolton, Life Insurance CEO, M&G said:
“An ageing population, with an increased chance of living longer, but not necessarily healthier, lives means that the challenge of securing better retirement outcomes is becoming more acute. At the same time factors that we may have come to rely on, such as low inflation and sustained growth, are no longer as certain as they previously appeared. I believe that now is the time for us to start talking about how each generation can navigate their way to a better retirement while simultaneously delivering benefits for savers of all ages.”
“A crucial part of that conversation is considering the role that large multi-asset investment vehicles, such as PruFund – M&G’s with-profits fund can play in helping people through the changing financial environment. Such funds have invested in real assets across the UK for many years and will continue to do so.” “With their investment success directly linked to the places those who save in them live and have an important role to play in society.”
“I look forward to the ILC shining a light on how we get more people across the generational divide to see the benefits of saving earlier and investing not only in their own futures but also the societies in which they live.”
Tom Evans, Managing Director, Retirement at Canada Life said:
“As an industry we know that future generations of retirees are likely to live and work for longer, claim their state pension later, and enjoy less generous private pensions than those that retire today. This will have wide-ranging consequences for individuals and their families, and significant implications for the UK economy.”
“We are delighted to be partnering with the International Longevity Centre UK to facilitate this important discussion on the future of retirement and the roles of industry, government, regulators, advisers, and others in building a dynamic retirement income market that works in the interests of future retirees.”
David Sinclair, Chief Executive, ILC added
“Future generations of retirees are likely to be poorer than retirees today. The state pension age is expected to increase, while the cost-of-living crisis is squeezing savings.
“Poor young people often become poor older people, so we need solutions that can reduce inequalities as well as ensure we can accumulate savings and access good advice all through our lives.
“To make long lives better for all, we must support decent incomes for everyone throughout life, including during retirement. The next election must be a turning point for retirement income – we need bold ideas and strong leadership if we are to ensure that future generations don’t end up poorer than their parents.”
For more information or to register for the Retirement Income Summit on Thursday 13 June 2024, please click here or go to https://ilcuk.org.uk/retirement-income-summit-2024/
Ends
Contact
ILC – Press@ilcuk.org.uk
Spokespeople are available on request.
Notes
Partnership opportunities
Media partnerships with the ILC, M&G, Canada Life for the Summit are available. As a media partner, your publication will gain access to industry leaders, cutting-edge research, and thought-provoking discussions, enabling you to deliver exclusive content and insights to your audience.
Previous ILC Retirement Income Summits
ILC has organised two Retirement Income Summits, the first hosted by the Actuarial Profession in 2012 and the second hosted by CII in 2016.
The first Retirement Income Summit in 2012 focussed on the impact of the Retail Distribution Review on the sector whereas the second focussed on the impact of the 2015 “Pension Freedoms”. The advice gap, open market option, and retirement income products were key topics of focus. It also considered long-term issues such as boosting retirement savings, transparency in the market, and dealing with small pension pots.
The June 2016 Retirement Income Summit, coming after the introduction of “freedom and choice” was focussed on how policy and the industry would need to adapt to the new environment and what the future might look like. Again, the conference focussed on accumulation and decumulation with advice being a strong theme throughout, alongside financial capability. A young people panel presented their visions and issues with pensions highlighting a view that they were inadequately supported to make the right savings decisions and that policy did not adequately support freelancers.
Sources
Financial Lives 2022 survey – Key findings from the May 2022 survey: Executive summary | FCA
About M&G
M&G plc is a leading international savings and investments business, managing money for around 5 million retail clients and more than 800 institutional clients in 26 markets. As at 31 December 2023, we had £343.5 billion assets under management and administration.
With a heritage dating back more than 170 years, M&G plc has a long history of innovation in savings and investments, combining asset management and insurance expertise to offer a wide range of solutions. We serve our retail and savings clients under the M&G Wealth and Prudential brands in the UK and Europe, and under the M&G Investments brand for asset management clients globally.
About Canada Life
Canada Life is part of a group of companies controlled by Great-West Lifeco Inc., a diversified financial services holding company headquartered in Winnipeg, Canada. Through its subsidiary companies, Lifeco has operations in Canada, the United States, and Europe. Great-West Lifeco and its insurance subsidiaries have received strong ratings from major rating agencies. Great-West Lifeco has over 42 million global customer relationships worldwide and £1.52trillion assets under administration (as at 31 December 2023).
Canada Life Limited began operations in the United Kingdom in 1903 and looks after the retirement, investment and protection needs of individuals and companies alike.
Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales no. 973271. Registered office: Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Canada Life Platform Limited, trading as Canada Life, is a subsidiary of The Canada Life Group (UK) Limited, and is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales no. 8395855. Registered office: Canada Life Place, Potters Bar, Hertfordshire EN6 5BA.
Stonehaven UK Limited, trading as Canada Life, is a subsidiary of The Canada Life Group (U.K.) Limited. Authorised and regulated by the Financial Conduct Authority. Registered in England and Wales. Registered number: 05487702. Registered office: Canada Life Place, Potters Bar, Hertfordshire, EN6 5BA.