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Australian-style retirement income targets may be coming to UK savers, writes Alex Warnakulasuriya for Pension Expert. That’s the suggestion of the Pensions and Lifetime Savings Association in a consultation paper.
“In 2017, the Association of Superannuation Funds of Australia set the lump sums required for a single retiree and a retired couple to achieve a comfortable retirement at AUD545,000 (£321,119) and AUD640,000 (£377,086) respectively,” he writes.
“Australians seeking a modest retirement needed a lump of AUD50,000 (£29,461) if they were single, or AUD35,000 (£20,623) as a couple. According to the ASFA, these figures were significantly lower because the base rate of Australia’s state pension, along with pension supplements, is sufficient to meet the expenditure required at this budget level.”
The new PLSA report suggests the UK develop similar income standards. The paper proposes an “increase [in] minimum automatic enrolment contributions from 8 per cent of … earnings to 12 per cent of salary over the course of the 2020s, once the experience of raising auto-enrolment contributions from 2 per cent to 8 per cent” is well understood.”
“In a way, a single target will be wrong for every individual, yet general targets are quite useful for most people,” Nigel Peaple, deputy director of DC, lifetime savings and research at the PLSA, is quoted saying.
More: Savers will set their own targets.

ARIA provides a forum for an informed discussion on retirement income adequacy, and other related issues, including pension and retirement coverage, and defined benefit pension plans – ARIA pensions blog, 12 Dunlop Street, Barrie, ON, L4N 1V6 – sitemanager@ariapensions.ca

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