The Association of British Insurers (ABI) has said that half of people of working age are not saving enough money into a pension, including a third who are saving nothing at all. It has called on the Government to bring forward plans for automatical enrolment into workplace pension schemes from 2012.
The ABI stated that if automatic enrolment was in place by 2010, it could lead to additional long-term savings of more than £500 million by 2012. Further, the ABI were said to be disappointed that savings had been overlooked by Mr. Darling in his Pre-Budget Statement.
In the meantime, Otto Thoresen, of Aegon UK, called on the Government to change the legislation governing converting a pension fund into retirement income. He has called for there to be a Second A-Day (the first one was in 2006) simplifying the rules for people who had retired, and in particular the one forcing retirees to buy pension annuities by the age of 75.
Mr. Thoresen stated that the basic pension annuity rules are inflexible. They were set many years ago as a way of addressing the increasing risk of longevity. The solutions on offer to people to help them live their lives in retirement cannot just tackle the risk of longevity. He added that the annuity rules needed to be broader, more comprehensive, and provide more flexibility.
