Ahead of the 10th anniversary of the introduction of auto-enrolment on the 1st October 2012, Katharine Photiou, Commercial Director of Workplace Savings at Legal & General, reflects on the impact of the landmark legislation and where the new government need to make further changes to improve the retirement prospects of millions of people in the UK.
Photiou stated the “impact of auto-enrolment” on those retiring in the UK “cannot be underestimated”. She continued:
“Last year, it was found that 88% of eligible employees (19.4 million) were participating in a workplace pension, an increase from almost four out of 10 eligible adults in 2012.”
Photiou did also admit, though, that “more needs to be done” to “improve the value of pension pots at the point people reach retirement”. She added:
“Auto-enrolment has been an enormous success in getting more people saving, but its passive nature remains a challenge. At Legal & General, we are keen to see a formal consultation into pension freedoms to assess if it has met its goal of creating adequate and sustainable retirement incomes.
We also want to see the introduction of regulated personalised guidance, which will allow people to make better informed choices. These should take into account someone’s full financial picture, including property wealth. The FCA pledged to carry out a review of the boundary between advice and guidance. This is a positive step forward and we’re in full support of an amendment to the rules that distinguishes guidance from full financial advice, so that people are confident that they are making choices that will serve them well in retirement.”
