Risk sharing: an age old solution to the old age problem

Welcome to our new report - Risk sharing: an age old solution to the old age problem.

The pensions industry needs to do more to support good retirement outcomes for DC savers. Millions of people in the UK are heading towards retirements that are worse than their parents generation.

The Pensions and Lifetime Savings Association's Retirement Living Standards state that maintaining a moderate standard of living in retirement will cost c.£23k per annum.

But that target is currently out of reach for most. Nearly 20% of employees still don’t save into a pension at all and only a small minority of the growing ranks of the self-employed are saving into a pension.

The DC generation is clearly in need of help. It’s not realistic to solve the problem with increasing contribution rates alone. The FCA has highlighted the lack of product innovation. There should be a real onus on the pensions industry to promote solutions which help members extract more value from their DC savings.

While we need to rethink contributions, investments and delivering value for money, the focus of this paper is risk sharing in retirement and how the various options might help DC savers, both in theory but also in practice.

We believe the pensions industry needs to do more to promote solutions which help members extract more value from their DC savings. We hope this paper encourages positive debate, so that together we help people make the most of their hard earned savings in retirement.

Thank you to all the individuals and organisations who have contributed to this paper with us.

If you have any questions, or would like to discuss further, please get in touch.

Access the report