NEWS WRAP - PLSA Publishes UK Retirement Living Standards
The Pensions and Lifetime Savings Association (PLSA) has published a guide to UK Retirement Living Standards* as part of a mission to assist people in working towards a prosperous future retirement.
Research by the PLSA found that 51% of retirement investors are overly focused on their current economic needs, with only 23% properly educated on what it will likely take for them to adequately fund their retirement. However, the newly published Standards are designed to address this shortfall by providing investors with the knowledge and guidance they need to picture their future lifestyle.
The study, which was carried out by the Centre for Research in Social Policy (CRSP) at Loughborough University, used the Joseph Rowntree Foundation's Minimum Income Standard to set some retirement income baseline needs based on a basket of goods and services including household bills, food and drink, transport, holidays and leisure, clothing and personal costs and helping others. The basket was then adapted in line with three separate standards of living for different income levels: minimum, moderate and comfortable.
The PLSA hopes that the Retirement Living Standards will become standardised across the retirement and pension planning industry and will be used by financial advisers to complement their expertise when engaging with clients. It has set an ambitious target: adoption of the Standards by nine in ten of all pension schemes with active savers by 2025.
Furthermore, the Money and Pensions Service is currently in discussions with the PLSA with a view to using the Retirement Living Standards as part of their Money Advice Service pension planning calculator.
A healthy-saving initiative
It is hoped that the Standards could assist the pensions industry by:
- Providing a robust set of standardised tools across schemes to aid communication, based on independent research
- Assisting schemes in inspiring savers to engage with their pension savings
- Providing pension savers with tangible information on retirement costs, to inspire confidence that they will meet their goals and objectives
Nigel Peaple, Director of Policy and Research at PLSA, commented in a press release, "The Retirement Living Standards will support better saver engagement. They distil robust, in-depth research with the public into an easy to understand basket of goods that helps people picture the future - and relatable figures that can provide a powerful and practical tool for encouraging engagement with saving."
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* https://www.retirementlivingstandards.org.uk/ Accessed 18-10-19
** https://www.plsa.co.uk/Press-Centre/Press-Releases/Article/PLSA-launches-Retirement-Living-Standards Accessed 18-10-19