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The decline of defined benefit pensions and the increase in defined contribution pensions is transferring the responsibility for securing an adequate income in retirement from employers to individuals. Yet many individuals do not know what level of savings they need to have an adequate income in retirement. The UK Government has taken some successful steps to start to address savings issues, through the implementation of Automatic Enrollment. But there are still a number of actions individuals, employers, the pensions and advice industry, and Government could take to improve individuals’ financial capability and help them to understand what an adequate retirement income could look like for them, and how to meet their retirement income goals.


The amount an individual needs to save will depend on a number of factors specific to that individual’s needs as well as their vision for their retirement. By comparing various countries’ strategies for retirement and different industry communications strategies, our work recommends implementing a bottom-up approach to savings in order to help individuals set goals and identify actions they can undertake to achieve those goals.

Our work highlights:

  • Across the UK, US, and Australia, individuals are underprepared for retirement when it comes to knowing how much money they will need in retirement and how long their savings might last.
  • We propose a bottom-up approach to retirement saving, so individuals can understand their retirement income needs, and identify what actions they can take to meet those needs, by setting retirement income goals.
  • Targeted communications is crucial for encouraging individuals to adequately save for retirement. Employers’ communication strategies have a role to play in maintaining individuals’ active engagement with their pensions, but the Government should also look to implement a joined-up communication strategy which is supported by the policy initiatives they implement and the tools they provide. 


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