Zarah ChoudharyA report from the Pensions Policy Institute’s (PPI), highlighted that the shift from defined benefit (DB) to defined contribution (DC) pension schemes has fundamentally transformed retirement planning, placing greater responsibility on individuals.
The report analysed how economic, demographic, and technological changes have influenced the experiences of savers and those nearing retirement.
It highlighted the transition from employer-sponsored pensions that guaranteed a retirement income to systems where individuals’ retirement incomes depend on their contributions and investment performance.
Sponsored by Capita Pension Solutions, Gold Supporters of the PPI, the report also marks Capita Pension Solutions’ 50th anniversary.
Regulatory changes, such as the introduction of automatic enrolment in 2012 and the Pension Protection Fund, reshaped the pension landscape by encouraging greater participation and providing safety nets for members.
Economic conditions, particularly soaring house prices and stagnant wage growth, have affected individuals’ ability to save for retirement, with high housing costs impacting disposable income and savings rates.
Longer life expectancies have also created a need for more substantial retirement savings.
Changing family dynamics, including increased caregiving roles and dual-income households, have influenced how individuals prepare for retirement.
The report suggested that technological advancements had transformed the administration and communication of pension schemes, with online portals and digital tools enhancing member engagement.
Pension freedoms introduced in 2015 provided greater flexibility in accessing savings but also added complexity and risk.
The growing focus on ensuring value for money (VFM) in pension schemes has led to changes in how schemes operate and are regulated, particularly regarding charges and investment returns.
Shantel Okello, policy researcher at The Pensions Policy Institute, said: “This retrospective not only reflects on the past but also poses crucial questions about the future of retirement.
“As we look ahead, addressing the challenges of balancing work and caregiving, improving contributions in pension savings, and ensuring adequate retirement income will become increasingly important.
“It’s essential that policymakers and industry leaders engage in meaningful discussions and collaborate on solutions that ensure adequate later life outcomes for all.”
Anish Rav, director of pensions policy and proposition at Capita Pension Solutions, said: “As we celebrate our 50th anniversary, it is fitting to reflect on the progress made by the pensions industry and to consider the challenges and opportunities that lie ahead.
“Understanding the evolving pensions landscape is essential for creating policies that improve retirement outcomes, and we hope that this report encourages those discussions.”
