Britons are increasingly sceptical that the state pension will suffice for their retirement, according to a recent survey by the Pensions and Lifetime Savings Association (PLSA).
More than half of employees believe the full state pension of £11,502.40 per year “will not be enough to avoid” poverty in retirement.
The survey also revealed that 62 per cent of respondents worry the pension age will rise before they retire, further exacerbating anxieties about financial security in later life.
A significant majority (73 per cent) agree that the state pension should increase in line with the triple lock, while 76 per cent believe increases are necessary to prevent a decline in living standards for pensioners.
In response to these concerns, there is growing support for higher automatic enrolment (AE) pension contributions.
Around half of those not yet retired (51 per cent) believe the minimum contribution for workplace pensions should rise from the current eight per cent to 12 per cent.
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Savers are calling for bolstered employee pension contributions to compensate
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This increase would aim to ensure people have more savings for retirement.
Many respondents also advocate for a shift in how contributions are split between employers and employees.
Nearly half (45 per cent) think contributions should be divided equally, while 43 per cent argue that employers should pay more than employees.
The survey also sheds light on current contribution levels and the potential for increased savings.
Among those paying into a workplace pension, a third (36 per cent) say less than 12 per cent is being paid in, while one in seven report contributions of 12 per cent or more, with an average contribution level of nine per cent.
However, there is room for growth, as 67 per cent of respondents stated they could contribute more over different periods of time.
Notably, 24 per cent could increase their contributions now, 25 per cent could do so within the next couple of years, and 18 per cent over a longer time frame.
Nigel Peaple, Chief Policy Counsel at the PLSA, emphasised the importance of addressing pension adequacy.
Britons are concerned they will not have enough for retirement
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He stated: “It’s essential that we act now to ensure people have enough savings for a secure retirement. This means maintaining the value of the state pension and gradually increasing minimum AE contributions from eight per cent to 12 per cent over the next decade.”
Peaple also highlighted the need for balanced contributions, saying: “In doing so, contributions should be evenly split between employers and employees, helping to ease the concerns of UK savers.”
He further stressed the importance of balancing investment strategies, noting: “While there is a desire among savers to see pension investments supporting UK companies and public services, this should not come at the cost of lower returns. Achieving the best possible returns must remain the priority, whether those investments are in the UK or overseas.”
Peaple concluded by calling on the Government to strike the right balance between supporting domestic growth and delivering strong returns for savers.
