Patrick O'Donnell
Guest Reporter
Investment platform TILLIT has issued a stark warning about Britain's looming retirement crisis, calling on the Government to put forward legislation to raise minimum pension contributions.
The pension provider has highlighted that over 80 per cent of UK households are currently falling short of achieving a comfortable retirement, claiming immediate action is needed to tackle what they describe as a potential "pensions timebomb."
The company is urging for changes to the current pension contribution system, emphasising that present rates are insufficient to secure adequate retirement savings for most Britons.
This warning comes as discussions about pension reform remain stalled, despite Chancellor Rachel Reeves previously initiating talks about increasing contributions.
Recently, Reeves visited Canada and Australia to lean more about each country's respective pension systems to see if the UK can take any inspiration from them.
Do you have a money story you’d like to share? Get in touch by emailing [email protected].
While Australian employers must contribute 11.5 per cent into workers' pensions, the UK minimum contribution rate stands at just eight percent, with employers only required to contribute three per cent.
Felicia Hjertman, TILLIT's founder and CEO, expressed her annoyance over the Government's current approach despite the Chancellor's previous promises.
She explained: "It's deeply frustrating to see the Government's continued inaction on raising the minimum level for employer pension contributions, thereby washing their hands of the collective responsibility to ensure people can afford to retire.
"Current contribution rates fall far short of what's necessary to ensure a comfortable retirement, something which the government was warned about by the Pension Commission in the Lord Turner report over a decade ago."
In response to these challenges, TILLIT has become the first UK pension provider to introduce auto-escalation as a default feature in their pension product. This approach allows members to automatically increase their pension contributions over time.
The system is based on the "save more tomorrow" concept, which has been successfully implemented in the US pension market for more than a decade.
"At TILLIT, our number one priority is to help people take control of their financial future, and that is why we have launched auto-escalation as a core feature of the TILLIT Pension," Hjertman added.
Research from PensionBee demonstrates how redirecting spending into pension contributions could significantly boost retirement savings.
LATEST DEVELOPMENTS:
The firm's analysis shows that moving just £200 into a pension pot could add between £305 and £521 to retirement savings, depending on time until retirement.
Even more substantial gains could be achieved by increasing contributions, with £400 potentially adding between £608 and £1,039 to a pension pot.
Becky O'Connor, Director of Public Affairs at PensionBee, commented: "With Christmas just around the corner, it's a great time for savers to reflect on their festive spending habits and consider whether some of that money could be redirected into their pension.
"Adding a lump-sum 'Christmas contribution bonus' into your pension is straightforward, and your future self will thank you for it."
Find Out More...
The pension provider has highlighted that over 80 per cent of UK households are currently falling short of achieving a comfortable retirement, claiming immediate action is needed to tackle what they describe as a potential "pensions timebomb."
The company is urging for changes to the current pension contribution system, emphasising that present rates are insufficient to secure adequate retirement savings for most Britons.
This warning comes as discussions about pension reform remain stalled, despite Chancellor Rachel Reeves previously initiating talks about increasing contributions.
Recently, Reeves visited Canada and Australia to lean more about each country's respective pension systems to see if the UK can take any inspiration from them.
Do you have a money story you’d like to share? Get in touch by emailing [email protected].
While Australian employers must contribute 11.5 per cent into workers' pensions, the UK minimum contribution rate stands at just eight percent, with employers only required to contribute three per cent.
Felicia Hjertman, TILLIT's founder and CEO, expressed her annoyance over the Government's current approach despite the Chancellor's previous promises.
She explained: "It's deeply frustrating to see the Government's continued inaction on raising the minimum level for employer pension contributions, thereby washing their hands of the collective responsibility to ensure people can afford to retire.
"Current contribution rates fall far short of what's necessary to ensure a comfortable retirement, something which the government was warned about by the Pension Commission in the Lord Turner report over a decade ago."
In response to these challenges, TILLIT has become the first UK pension provider to introduce auto-escalation as a default feature in their pension product. This approach allows members to automatically increase their pension contributions over time.
The system is based on the "save more tomorrow" concept, which has been successfully implemented in the US pension market for more than a decade.
"At TILLIT, our number one priority is to help people take control of their financial future, and that is why we have launched auto-escalation as a core feature of the TILLIT Pension," Hjertman added.
Research from PensionBee demonstrates how redirecting spending into pension contributions could significantly boost retirement savings.
LATEST DEVELOPMENTS:
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The firm's analysis shows that moving just £200 into a pension pot could add between £305 and £521 to retirement savings, depending on time until retirement.
Even more substantial gains could be achieved by increasing contributions, with £400 potentially adding between £608 and £1,039 to a pension pot.
Becky O'Connor, Director of Public Affairs at PensionBee, commented: "With Christmas just around the corner, it's a great time for savers to reflect on their festive spending habits and consider whether some of that money could be redirected into their pension.
"Adding a lump-sum 'Christmas contribution bonus' into your pension is straightforward, and your future self will thank you for it."
Find Out More...