Could retirement income targets improve later life planning?
An influential trade body has said government and pension providers should develop national retirement income target to help people save for later life.
A recent report from the Pensions and Lifetime Savings Association (PLSA) revealed that around 80% of people – equivalent to around 30 million individuals of the working age – do not feel confident that they are saving enough for retirement.
The report also found that just under three quarters (74%) of people believe retirement income targets, similar to those used in Australia, would make retirement planning much simpler.
The trade body recommends that the targets should be introduced as a form of guideline for people when saving for their future, providing them with a clearer objective in order to be better prepared financially. Additional proposals included increasing signposting for relevant and appropriate product options upon retirement as well as looking at how equity release products can be made more flexible.
Commenting on the recommendations was Nigel Peaple. PLSA’s director of policy and research said: “Millions of savers are confused about whether they’re on track for the lifestyle they want in retirement.
“We believe that a simple and widely promoted system of retirement income targets would make it much easier for savers to know whether they are saving the right amount.”