The UK’s pension system has been slammed as being in a “shocking state” with Britons being saddled with “inadequate” savings by experts.
Investment organisations, including ShareAction, Make My Money Matter and Finance Innovation Lab, have launched a new five-point reform agenda to prevent crisis hitting peoples’ retirement savings.
The manifesto offers policy recommendations to tackle the pending pension crisis, as well as the ongoing climate crisis.
Furthermore, the non-profit organisations surveyed pension savers to get their opinion on what should be done to bolster their pots.
Some 77 per cent of the British public believe the Government should be doing more to make sure pension holders have additional retirement savings.
Just under two-thirds say the government should do more to ensure UK pensions tackle the climate crisis.
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The country's pension system has been described as being in a "shocking state"
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Jesse Griffiths, the CEO of Finance Innovation Lab, outlined why the reform of the country’s pension system is essential to protect peoples’ retirement going forward.
He explained: “With over £3trillion in assets, UK pension funds are major investors. But right now, the pensions system is in a shocking state.
“People are right to be worried that their retirements will be ruined by climate change and inadequate pension savings.
“It’s time for the government to act and adopt a bold but sensible reform agenda that can make the pensions system work for savers, the environment, and the economy.”
Among the proposals put forward to boost retirement savings and the state pension include increasing the minimum level people have to contribute.
The manifesto suggests this should be raised to 12 per cent or more with a five per cent contribution from the employee and seven per cent from their employer.
Furthermore, Finance Innovation Lab is calling on the Government to ensure that default pension options focus on long-term investments.
According to the proposal, pensions funds should be supported to drive green investment in the country’s economy.
This could reportedly be done by expanding institutions such as the UK Infrastructure Bank and developing initiatives that speed-up the uptake of new technologies.
As well as this, the manifesto recommends cleaning up pension funds and phasing out fossil fuel investments.
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A survey carried out by the investment groups found the public supports greater assistance from the Government
GETTYFinally, the proposal is calling for improvements to transparency and accountability to ensure schemes have a responsibility to hear the views of their members.
On the report, Catherine Howarth, the chief executive of ShareAction, said: “Enormous challenges lie ahead for pensions policy makers, from ensuring people have enough income to live well in later life to ensuring pension investments don’t undermine people’s future security by exacerbating climate change.
“This report sets out a host of practical reforms that would set the pensions sector up for long term success. These include clarifying the legal duties of pension schemes to allow them to address social and environmental considerations in their investment decisions when these are relevant to the long-term best interests of scheme members.”
Tony Burdon, the CEO of Make My Money Matter, added: “We are calling on all political parties to put our pension reform agenda at the heart of their manifestos ahead of the upcoming election, and ensure action is prioritised in the first term of the next Parliament.”