A new report from the Institute for Fiscal Studies (IFS) indicates that pension savers could be missing out on opportunities to boost their retirement income at certain key life stages. It suggested that nudging employees to change their pension savings around major life events could have desirable effects.
The report also suggested that higher minimum employee contributions for higher earners, or a form of "auto-escalation", with default pension contribution rates increasing alongside rises in earnings, could nudge people towards saving more into their pensions. Mortgage providers could also ask their customers in advance how much of their mortgage repayments they would like to divert into their pension when their mortgage term ends, the IFS said.
Paying off a mortgage, getting a pay rise, or seeing adult children leave home and become more financially independent, could be points where people find they have fewer spending commitments and more disposable income, which could go towards their later-life fund.
