Challenges for the private pension system in the UK and policy proposals to address them

The key challenges are: a significant share of employees, and the vast majority of self-employed workers, are not saving in a private pension; even among savers, low contribution rates mean many are on track for inadequate retirement incomes; and people face complex decumulation decisions, where few take financial advice or buy annuities.

The authors propose: increases in default contribution rates which rise faster as people earn more; a minimum employer pension contribution irrespective of whether employees contribute; facilitation of private pension saving for self-employed workers; and people should be guided towards partial annuitisation later in retirement to provide some longevity insurance.