Are people saving enough for retirement?

Thanks for having us.

Thanks.

So to start us off, Heidi, can you tell us a little bit about the background here? What are the different sources of income that pensioners can draw on in their retirement?

Yeah.

So in the UK there are kind of two main parts of the, uh, pension system.

So we have the state pension.

Um, this nowadays is a flat rate amount, so most people, if you've been in the country for 35 years, so if you've been either working, uh, caring for children, if you've been, um, receiving means tested benefits, all of that builds entitlement to this, uh, new state pension.

And the full amount of that is currently worth £12,500, uh, per year.

And that's kind of a foundation of retirement income, and on top of that, people can then build private pension saving.

Uh, in the past, a lot of people had what we call defined benefit pensions.

These are kind of final salary schemes which, uh, guarantee an income stream, uh, in retirement.

But nowadays, most people have what we call defined contribution pensions, and more and more people have those because of automatic enrollment.

So since 2012, employers have to automatically enroll their, um, their employees into a private pension and contribute a minimum amount.

So that's kind of where we are today.

Now, of course, for some people, especially those on low incomes, uh, people with disabilities, caring responsibilities, there are also some means tested benefits, disability benefits and so on.

But really for most people it's the state pension and then any private pension that they've built on top of that, that, uh, constitutes their total income in retirement.