The Association of British Insurers (ABI) has warned that pensions automatic enrolment could leave individuals ‘without adequate retirement funds’.
The trade association found that, despite the forthcoming rise in contribution levels to 8% in 2019, the majority of pension savers will be left without enough money for their retirement.
The ABI is calling for the government to outline ‘clear plans to push up contributions after 2019’, and has urged it to explore ways in which employees can be incentivised to begin planning and saving for their retirement.
Meanwhile, figures published by the ABI revealed that auto-enrolment has helped to increase the number of work-based pensions. These hit a ‘record high’ last year, with 7.5 million policies having been taken out.
Yvonne Braun, Director of Policy, Long-term Savings and Protection at the ABI, said: ‘The success of automatic enrolment shows how the power of policy can benefit society in the long-term.
‘But we cannot let our guard down now. We urge the government to widen the auto-enrolment net to help even more people start saving now for their future.’