The majority (71%) of UK adults believe the government should set out a plan to increase the minimum auto-enrolment pension contribution rate.
The research, from Phoenix Group, also found that the current statutory minimum contribution level of 8% – from the employee and employer – is unlikely to provide enough funds for most people to meet their retirement expectations.
Meanwhile, over a quarter (27%) of non-retirees think the minimum auto-enrolment contribution rate is too low.
Of this group, 51% think the minimum contribution should increase to at least 12% and 20% think it should increase to at least 15%.
Phoenix Group’s longevity think tank, Phoenix Insights, suggests around 14 million people – or half of defined contribution pension savers – are not on track for their expected retirement income.
Overall, 68% of those say they are facing a savings gap of more than £100,000.
Additionally, Phoenix Group is calling for a new pension adequacy review to support long-term financial security and is urging all political parties to commit to delivering this in the next Parliament. This should cover both private and state pensions, it said.
When asked what they thought an ‘adequate’ income in retirement was, the top response from UK adults was an income level where ‘basic needs are covered with some money left over for non-essentials’.
The majority believe it is the government’s responsibility to ensure people achieve this retirement standard.
This held true regardless of voting intention, with 83% supporting a government review to see whether the current pension system is delivering this outcome.
Phoenix Group, in partnership with WPI Economics, has recently published a framework for increasing minimum auto-enrolment contributions from 8% to 12%.
Phoenix Insights director Catherine Foot said: “Auto-enrolment has been successful in kick-starting pension saving for millions of people, but the current minimum contribution rate is too low for most savers to achieve an adequate retirement income and may be giving some a false sense of security.
“We need a government plan to increase contributions and help address the pension-saving gap, as part of a wider review of the pension system to ensure it is helping people to save enough and be more financially secure over the long-term.
“Delays and inaction on this could leave generations of future retirees unable to enjoy the lifestyle they hoped for when they retire or struggling financially, with millions more relying on state support later in life.”
Standard Life managing director for workplace pensions Gail Izat added: “More needs to be done to help people secure a decent standard of living in retirement, and raising minimum contributions is the single most powerful mechanism available.
“While it’s important that we move when the time’s right for both savers and employers, prolonged inaction risks continued under-saving and the UK sleepwalking into a retirement savings crisis.
“It’s clear that people support action on raising minimum contributions if the current rate isn’t adequate, and we urge the next government to put a review in place.”
Standard Life is part of Phoenix Group.
Public First, on behalf of Phoenix Group, surveyed 3,014 UK adults to obtain these results.
Source: UK adults in favour of increasing auto-enrolment contributions | Money Marketing