Around 17 million private sector workers now saving into a pension will be given the option of an income in retirement, closing the gap with pensions seen in the public sector, under government plans for default pensions lau…
Over the last 30 years, the vast majority of private sector Defined Benefit ( DB ) pension schemes, that once provided an inflation protected income for life in retirement, have closed.
The introduction of Automatic Enrolment means nine in 10 eligible private sector workers are now saving, up from four in 10 in 2012. But the vast majority are saving into Defined Contribution ( DC ) pensions and are left entering retirement with a savings pot rather than a route to a genuine pension that provides a secure income that lasts throughout their later life.
The Government is now acting to resurrect the option of genuine pensions for all private sector workers. Guided Retirement will bring back pensions that pay an income, often inflation protected, for the entirety of your retirement without the need for complex financial decisions.
This is the latest part of the Government’s agenda to fundamentally reform the UK’s offer to today’s workers who are tomorrow’s pensioners. It combines a sustainable State Pension that is the foundation of later-life income, real pensions that all workers pay into during their working lives to enjoy in retirement, and a new National Care Service that will be there for people when they need it.