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Molly Broome @mollybroome.bsky.social · Jul 31

Addressing this issue is a key priority for the Government, as reflected in the revival of the Pensions Commission. The Commission will explore ways to improve retirement outcomes for those already in the AE system and for those currently missing out. www.gov.uk/government/p...

Pensions Commission: Terms of Reference

www.gov.uk

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Molly Broome @mollybroome.bsky.social · Jul 31

AE has been a major policy success, significantly increasing pension participation. However, the statistics released today reveal that some groups still have lower participation rates, which could leave them more vulnerable to poverty in retirement.

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Molly Broome @mollybroome.bsky.social · Jul 31

The proportion of people who start saving but then opt out within the opt-out period has been trending upward over time. This may reflect increased cost of living pressures in recent years or could be linked to the freezing of the earnings trigger and lower earnings limit.

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Molly Broome @mollybroome.bsky.social · Jul 31

Pension participation also varies by ethnicity. Only 68% of eligible Pakistani and Bangladeshi employees were saving into a pension in 2022-23 to 2023-24, compared to 87% of eligible White employees.

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Molly Broome @mollybroome.bsky.social · Jul 31

Just 17% of the self-employed were participating in pension saving in 2023-24, down from 21% in 2009-10.

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Molly Broome @mollybroome.bsky.social · Jul 31

Eligible part-time employees are also less likely to be saving into a workplace pension, compared to full-time employees. That gap has widened over time.

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Molly Broome @mollybroome.bsky.social · Jul 31

Workplace pension participation also increases with earnings: 79% of eligible employees earning £10k-£20k were saving into a workplace pension, compared to 94% of those earning £70k or more.

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Molly Broome @mollybroome.bsky.social · Jul 31

But employees working for small employers were less likely to participate in workplace pension saving: only 59% of eligible employees at companies with fewer than 5 employees were saving into a workplace pension.

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Molly Broome @mollybroome.bsky.social · Jul 31

Around eight-in-ten (82%) employees in Great Britain were saving into a workplace pension in 2024 – this amounts to 23.3 million people in total.

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Molly Broome @mollybroome.bsky.social · Jul 31

New workplace pension participation statistics were published this morning, revealing that certain groups remain at greater risk of heading into retirement with insufficient savings. Here’s what you need to know 🧵

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Molly Broome @mollybroome.bsky.social · Jul 15

Two decades after the Pensions Commission, the focus is no longer on pension participation. Today’s challenge is adequacy, flexibility, and sustainability - and the upcoming review is likely to reflect that shift.

Molly Broome @mollybroome.bsky.social · Jul 15

We have previously suggested linking both working-age and pensioner benefits to earnings growth. This would preserve purchasing power while ensuring intergenerational fairness and fiscal realism. economy2030.resolutionfoundation.org/reports/shar...

Sharing the benefits - The Inquiry

Can Britain secure broadly shared prosperity?

economy2030.resolutionfoundation.org

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Molly Broome @mollybroome.bsky.social · Jul 15

The triple lock should also be on the table. It has played a major role in boosting pensioner incomes, but it’s not without trade-offs. Given today’s fiscal pressures, it’s time to explore more balanced uprating mechanisms – ones that protect incomes while supporting long-term sustainability.

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Molly Broome @mollybroome.bsky.social · Jul 15

Life expectancy varies significantly across regions, so delaying retirement may be justifiable for some, but it risks penalising those in poorer areas who already face shorter retirements. www.resolutionfoundation.org/comment/why-...

Britain’s inheritance boom could further decouple people’s retirement age from their state pension age • Resolution Foundation

The UK’s state pension age is going up – and perhaps faster than expected. The age at which you can draw the state pension is due to rise from 66 to 67 by 2028. And the Government is now reportedly co...

www.resolutionfoundation.org

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Molly Broome @mollybroome.bsky.social · Jul 15

The State Pension is also expected to be in scope. Demographic change and rising longevity are increasing its fiscal cost. And while raising the State Pension age can provide some relief to the public purse, it remains a blunt tool.

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Molly Broome @mollybroome.bsky.social · Jul 15

The review should also consider flexibility – particularly whether models like ‘sidecar’ savings accounts can help people balance long-term savings with short-term financial resilience. www.resolutionfoundation.org/publications...

Precautionary tales • Resolution Foundation

Families in Britain are confronted with what can be termed a ‘triple savings challenge’. This encompasses a lack of accessible ‘rainy day’ savings to cushion small cashflow shocks, inadequate precauti...

www.resolutionfoundation.org

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Molly Broome @mollybroome.bsky.social · Jul 15

This highlights a fundamental question for the review: should policy aim to deliver full adequacy for all, or act as a foundation that leaves space for individual choices and top-ups? The Pensions Commission was clear that it should be the latter.

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Molly Broome @mollybroome.bsky.social · Jul 15

In response to adequacy concerns, there have been calls to increase default contributions above 8%. But policymakers must proceed with care. While higher rates might help middle and higher earners reach their TRRs, they risk leading to over-saving among lower earners.

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Molly Broome @mollybroome.bsky.social · Jul 15

But while participation is up, adequacy remains a concern. Recent @theifs.bsky.social research shows that 39% of private sector employees are not on track to meet their target replacement rate (TRR) – the level needed to maintain living standards in retirement.

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Molly Broome @mollybroome.bsky.social · Jul 15

Currently, employees are enrolled into a workplace pension if they are aged 22 to State Pension age and earn at least £10,000 a year. The minimum total contribution is set at 8% of qualifying earnings (between £6,240 and £50,270), with 3% from the employer and 5% from the employee.

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Molly Broome @mollybroome.bsky.social · Jul 15

It’s been 20 years since the Pensions Commission laid the foundations for auto-enrolment. Since then, a lot has changed: in 2009, 50% of employees saved into a workplace pension; by 2023, this had risen to 80%.

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Molly Broome @mollybroome.bsky.social · Jul 15

Tonight, Rachel Reeves delivers her Mansion House speech, and we expect she’ll announce the long-awaited review into pension adequacy (alongside other reforms such as financial deregulation).

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Molly Broome @mollybroome.bsky.social · Apr 24

Read our full analysis here: www.resolutionfoundation.org/publications.... Thanks to my co-authors @alexclegg.bsky.social and @epybus.bsky.social, and @financialfairness.bsky.social for supporting the research.

Saving penalties • Resolution Foundation

Means-tested benefits in Britain are built on the principle that individuals with significant financial resources should use those before turning to the state for help. That’s why wealth – as well as ...

www.resolutionfoundation.org

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Molly Broome @mollybroome.bsky.social · Apr 24

Finally, removing the cliff edge at £16,000 (costing £900 million in 2029-30) should be considered as part of the upcoming review of UC. While not an immediate priority, this reform would remove cliff edges, poverty traps, and perverse incentives.

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Molly Broome @mollybroome.bsky.social · Apr 24

Second, uprating the current capital limits with prices from 2026-27 onwards (costing £135 million in 2029-30) would prevent the system from becoming increasingly punitive over time.

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