The stark reality is that if we continue on our current trajectory, the retirement journey will turn out to be a rough one for many people, and those that may have to fill the income gap – the young and in work – may resent funding, via taxes, the deficit.
So how does the industry, regulators and government work together to ensure we are not heading for a retirement crisis in the future?
Those firms active in the market need to work much harder for consumers to ensure that they are getting optimal outcomes.
The government needs to coordinate regulation better to avoid the efficacy of the pensions system to protect individuals from old age poverty being undermined by short-term needs to raise tax revenues.
And the retirement income market must work with government and employers to find a better deal for consumers through empowering solutions and greater incentives.
Ultimately, the UK needs a coherent approach to the long-term savings conundrum to avoid the state having to bail out those who outlive their pension assets.
Otherwise, we face damage to future intergenerational solidarity.
Clive Bannister is chief executive of Phoenix Group
