FT Adviser (22/05/2019) – With individuals around the world relying on governments to provide nearly half of their retirement income, greater collaboration is needed between government, employers and savers, according to Aegon.
According to Aegon’s Retirement Readiness Survey, published on Monday (May 20), individuals are relying on the government to provide 46 per cent of their total retirement income, alongside 30 percent from their own savings and 24 per cent from employer retirement benefits.
But this is expected to shift more towards personal savings in the future as government backed pensions become less generous.
In response, Aegon called for a new framework for retirement savings.
The report stated: “With the proportion of these sources of retirement income expected to increasingly shift towards personal savings, individuals need to be proactive in anticipating and developing their retirement plans.
“People need the help of employers and governments through the establishment of a more a supportive framework that can help them make sound decisions.”
Ricky Chan, director at IFS Wealth & Pensions, said: “Having a backup plan is important because life is not smooth sailing.
“For example a financial planner will typically incorporate various ‘what if’ scenarios, such as a premature death of a spouse and an untimely market crash affecting investments. This prompts a discussion with the client on how they’d respond to cope with these unforeseen events, which in turn better prepares them if the worst game to worse.
“By going through this process, one would hope that more people become consciously aware of their savings and spending habit, so have a higher chance of being financially independent and live the lives they (and their family) want in future.”
Full article link: https://www.ftadviser.com/pensions/2019/05/22/aegon-calls-for-global-collaboration-on-retirement-saving/
