Lord Hutton: Save 15% of Your Income to Avoid Pension Poverty

Current savings levels are not sufficient to stave off pension poverty warns Lord Hutton. The UK must adopt a significantly higher savings target if we want a comfortable retirement

Emma Wall 11 March, 2015 | 5:11PM

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Brits must double their pension contributions to avoid living in poverty in retirement, former Labour pensions minister Lord Hutton has warned. In order to secure a comfortable retirement, savers must put aside 15% of their annual salary – or risk losing basic public services such as the NHS.

Auto-enrolment has gone some way to plug the pensions gap in the UK, adding five million people to workplace pension schemes since it began in October 2012. Currently the minimum required employee contribution is just 1%, which is then matched by the employer. This will automatically rise to 8% of salary in 2018, but Lord Hutton says even this is not enough. He proposes introducing a national savings target of at least 15% to ensure that poverty in retirement is erased.

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Emma Wall  is former Senior International Editor for Morningstar

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