Auto-enrolment while successful will not provide enough cash for retirement at current levels, the Association of Consulting Actuaries has warned.
The professional body has published its own pensions and savings manifesto ahead of a general election.
It sets out what it called a narrow and achievable list of priorities for political parties to focus on to improve the levels of pension savings in Britain.
ACA chair, Steven Taylor, said: “Auto-enrolment, whilst a success in terms of restoring and extending coverage will not provide the level of income most savers expect.
“The auto-enrolment minimum will need to be either materially stepped up or combined with other measures including greater support for risk pooling arrangements such as collective defined contribution, and voluntary ‘sidecars’ to deliver anything like a comfortable retirement for this and future generations.”
Taylor added defined benefit schemes can continue to have a positive role in addressing long-term savings inadequacy.
The ACA manifesto calls for a series of policy initiatives to be considered by political parties, including the completion of current reforms like the pensions dashboard.
The body thinks the minimum auto-enrolment contribution should be boosted to at least 12 per cent over the next 10 years and flexible ‘sidecar’ savings should be introduced for levels above auto-enrolment levels with tax relief.
Taylor added: “Without action, almost half of the UK working age population are on course for financial disappointment in retirement or may end up working for far longer than they currently expect.
“Research by Nest during 2021 indicated that sidecar savings can be very effective for groups that have previously not had money put aside.
"We also agree with their anecdotal findings of a further positive link between voluntary savings and financial wellbeing and resilience.”
Other suggestions from the body include introducing a default collective defined contribution provider for individual decumulation and replacement of the triple lock for state pensions sustainability.
tara.o'connor@ft.com
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