PLSA launches initiative to improve UK’s retirement and intermediaries asked to respond

by | Oct 12, 2017

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The Pensions and Lifetime Savings Association (PLSA) has launched a major new consultation called Hitting the Target– Delivering Better Retirement Outcomes to help people plan for and meet their retirement goals.

It’s asking for Intermediaries and other interested parties to respond as its seeks to consult on the development of a set of new national retirement income targets and on the changes to the current retirement saving system necessary to meet those targets.  The PLSA will also be engaging with Government as part of the process.

PLSA has published figures which show that identifying how much you need to save for retirement is a significant challenge for most people even those who benefit from financial advice with only 16% saying they know much they would need to achieve the standard of living they hope for in retirement. And of those who said they knew, 43% had come to this conclusion on their own, 30% have asked family and friends, 16% spoke to their pension provider and 13% had paid for professional financial advice.


What’s more, not only do people find it hard to determine how much they need to save, but they were also unsure as to where to go to find out if they were on track. Just over one in five (22%) said they knew where to get this information – saying they would speak to their pension provider (51%), a professional advisor (31%), or undertake online research (22%).

PLSA points out that National Retirement Income Targets (RITs) – which are currently used successfully in Australia – provide savers with tangible income goals which take into account what they need to save in order to achieve different standards of living in retirement (minimum, modest and comfortable). It believes that this will address one of savers key challenges as there is currently no widely accepted and generally understood target for retirement income.

More than three quarters (77%) of people admit that they do not know how much they need in later life and four out of five people (80%) said that a national retirement income target would help them plan for later life. These targets are likely to be of particular interest to intermediaries as not only could they be incorporated into suitability reports, but would act as a prompt to discuss how clients might make up any shortfall.


As part of the consultation process, further in-depth analysis will be undertaken to determine exact income levels and the PLSA welcomes views from interested parties.

Director of External Affairs at the Pensions and Lifetime Savings Association Graham Vidler said: “Retirement planning is confusing for most of us and is one of the areas that people frequently speak to their intermediaries about.   We believe that a set of Retirement Income Targets could benefit both clients and their advisers as it will provide a nationally recognised standard that people can work to achieve over their working lives.  The PLSA is particularly keen to engage with intermediaries as part of this consultation as they understand the challenges people face whether they have just started saving for retirement or about to finish work.

“With automatic enrolment increases on the horizon, now is the time to ask difficult questions to help more people make the right choices around retirement.  We are also looking to develop a new set of Retirement Income Targets that will empower savers by providing tangible targets for them to achieve.  We look forward to working closely with stakeholders to build a retirement savings market which is truly focused on the end users – savers.”


As part of the consultation, the PLSA will be looking at the following areas to help them do so:

  • How can we let people know about their money in ways and at times which make sense to them? How do we improve engagement by using simple standardised messages?
  • How can we bring more people into the scope of Automatic Enrolment (AE) and spread the benefits of a successful implementation?
  • Should the current system of tax relief be modified to support savers in achieving the new retirement income targets?
  • How can we gradually increase the level of minimum contributions into AE – beyond those already planned – without discouraging people from saving?
  • Can we do more to help people turn their property wealth into retirement income? Can pension schemes play a role in helping unlock the supply of housing which people need?
  • How can we support realistic extensions to working lives?
  • How can we ensure that people get what they want when they turn their pension savings into income? What are the respective roles of defaults and engaged decision-making?
  • How can we let people know about their money in ways and at times which make sense to them? How do we improve engagement by using simple standardised messages?

Vidler again: “Savers will need support as they work to achieve the Retirement Income Targets and we need to consider what might need to change within the UK retirement and savings market to facilitate these steps forward.  Advisers spend a considerable amount of time helping their clients navigate the retirement market so we are particularly keen to hear their views.  Our report sets out some of the changes we think are necessary but we want everyone with an interest in the nation’s retirement future to respond – challenging, improving and building on our proposals.”

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