IFS - Lots more employees have a pension and they expect to retire later

5 Mar 2020 10:50 AM

The last decade saw substantial reforms to the UK retirement savings environment, including obliging private sector employers to enrol most employees into a workplace pension and the implementation of the first ever increases in the UK state pension age.

These are among the key findings of two new reports, published today and funded by the IFS Retirement Saving Consortium and the Economic and Social Research Council. They examine how individuals’ retirement-related attitudes, expectations and behaviours have changed over the last decade.

 On automatic enrolment:

 On retirement ages:

Other findings include:

Pascale Bourquin, a Research Economist at IFS and an author of one of the reports, said:

‘Automatic enrolment substantially boosted workplace pension participation. Much of the increase has come amongst employees who appear to be relatively financially secure and is therefore likely to be a good thing – this is automatic enrolment doing precisely what it was designed to do. Some of the increase in pension participation comes among those who appear to be financially insecure and who may in fact benefit from opting out of their pension scheme in favour of more take-home pay today. While this is a relatively small group, it is potentially worrisome, and highlights that defaults can have very strong effects and should be set with caution.’

Rowena Crawford, an Associate Director at IFS and an author of the other new report, said:

‘The last decade has seen a striking increase in the ages that those aged 40 to 54 expect to retire at. This suggests that increases in the state pension age are being noticed and, at least by some, reflected upon – especially given that, for the first time, significant proportions report that they expect to retire at age 67. It will be interesting to see whether future generations reaching these ages expect to retire later still, given plans to increase the state pension age further.’

Download full report