1 Aug 2011

Workers face ‘bleak future’, pensions report says

Britain’s pensions system is in urgent need of improvement if millions of workers in the private sector are to save enough for retirement, a new report says.

A commission set up by the National Association of Pension Funds uncovered “widespread concern” about the charges, risks and complexity of the pensions of 23 million workers.

The Workplace Retirement Income Commission said workers must get a better deal from their pensions if they are to save enough for their retirement.

Lord McFall of Alcluith, who chaired the commission, said the spotlight for reform had rightly fallen on public sector pensions, but he added there were “critical problems” in private firms as well.

pensions - reuters

“Too many people are stuck in a complex, costly and inefficient system that relegates the consumer’s interest to second place. On top of that, they simply aren’t saving enough to secure a decent retirement,” he said.

“People need to get more bang for their buck, or they’re not going to bother with a pension.

“Instead they’ll end up spending today, ignoring tomorrow, and scraping by in poverty on the state pension. We cannot stand by and let that happen. The complacency of many in the pensions industry is alarming,” Lord McFall added.

The commission said fee structures were too “opaque” and too many people were being short-changed by their annuity choice.

Trust in pensions was low, said the report, calling for a permanent, independent commission to be established to take the politics out of pensions.

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