This is Armchair Economics with Hamish McRae, a subscriber-only newsletter from The i Paper. If you’d like to get this direct to your inbox, every single week, you can sign up here.
The Government says we have to save more for our pensions, some of us much more. The Pensions Commission’s latest report, Pensions 2050, out this month, warned particularly about the position of self-employed people if they didn’t set aside more of their income and put it into a pension pot.
Only four per cent of wholly self-employed people have any private provision, and the number is even lower among the young. But the problem is much wider than that, as nearly half of working-age adults, that’s 18 million people, are not saving for a pension at all.
Commenting on this, Torsten Bell, who is minister for Pensions, said: “Britain has got back into the pension saving habit, but the job is only half done with tomorrow’s pensioners still on track to be poorer than today’s. The Commission warns that without action, millions more people could be at risk of becoming reliant on state support in retirement.”
He’s right at one level. But many people understandably feel that they are saving for their pensions with the huge amount they and their employers are paying in national insurance contributions. After all, 35 qualifying years and you get a full state pension. As long as the Government maintains the triple lock – whereby it increases by inflation, average earnings, or 2.5 per cent – many people assume that should be enough to live on. But that is only guaranteed for the life of this Parliament.
