Several key challenges are threatening the living standards of workers hoping for a comfortable retirement, according to the Institute for Fiscal Studies (IFS). It said the past 20 years have seen the continued decline of salary-linked [defined benefit] pensions in the private sector and low typical contributions to defined contribution pension schemes.
The IFS added that the introduction of pension freedoms has given people flexibility over their retirement, but individuals, rather than employers or insurance firms, now often bear the burden of the risk of poor investment performances and uncertain lifespans.
The IFS has launched a pensions review in partnership with the abrdn Financial Fairness Trust, a charitable trust which funds work to tackle financial problems and improve living standards for people on low-to-middle incomes. The report, published last week, said: “We need a major review of pension provision now in order to give us a chance of avoiding a future that looks worse than the present.”
