17 October 2019
The PLSA has today launched new Retirement Living Standards which have been developed to help people picture their future retirement and what that might cost.
The standards are pitched at three levels – minimum, moderate and comfortable – based on a basket of goods and service, from food and drink to holidays. They have been developed from independent research undertaken by Loughborough University.
Commenting on the standards, Laura Myers, Head of DC at LCP and chair of the PLSA DC Committee, said:
“The new standards give people more clarity and tangible savings goals based on up to date research and numbers. Pensions are often criticised for being full of jargon and complex communications, but these standards talk to people in a language pensions savers will understand, framing it around people’s individual life goals and priorities. Breaking the savings targets down and quantifying them into three categories means that people know how much exactly they should be aiming to save for minimum, moderate or comfortable retirements.
“At LCP we have embedded the new standards into our DC modeller, LCP Horizon as we think these new measures will help trustees and employers quantify DC strategy decisions. It will also highlight how changes to investment strategy or contributions structures for example will impact members retirement living standards. We will also be using these figures in our communication tools, so that when we provide clients with modellers on retirement savings they are all based around the same retirement living standards that we hope the industry will be using.
“Let’s hope that this is a lightbulb moment for pension savings. For millions of savers, the ability to know if they are on track with pension saving for the retirement they want is now going to be so much simpler.”
You can find out more about the standards by watching this video here
To see Laura Myers explain more about how the standards will be used in practice, you can watch this video here