As a society, our savings habits are woefully inadequate. Figures released by Prudential today claim that one in six people retiring this year will depend entirely on the state pension, surviving on a meagre £107.45 per week.
Outside of this group, 35% of people retiring in 2012 have saved into a company pension, and 30% will draw on a mixed bag of investments, personal pensions, part-time work and hand-outs from their families.
Am I bothered?
As a nation we are shirking the responsibility for providing for what could be a third of our own lives; those years after age 60 or 70.
The usual reason given for having not saved enough into a pension is that it is unaffordable when faced with buying a home and bringing up children.
Is compulsory pension savings the only way to plug the savings gap
The other reason often given is that pensions are too hard to understand.
All of this is usually rounded off with a resignation to be impassive; retirement is too far away to worry about, after all.
Pensions: The odd one out
For some strange reason, it has become acceptable for people to shun personal responsibility for pensions, even though we take for granted our responsibility to protect ourselves from other risks facing us.
For example, it is illegal to drive without at least some car insurance; and who would invest hundreds of thousands in a flat or house without taking the trouble to insure it against flood, fire and theft?
So why is it OK to say insuring against the risk of reaching an age when we cannot work is not important, too expensive and too complicated? Statistically, living beyond working age is a far greater risk than a car crash or a burglary; according to 2012 Office for National Statistics (ONS) figures, life expectancy was 78.2 for men and 82.3 for women.
Who picks up the slack?
If you follow the line of argument that the UK has abdicated responsibility for saving, leaving their survival beyond age 70 entirely to chance, then the next logical step is that someone else must take charge.
This is the foundation of the state pension, of course. But the state can no longer afford to fully support its swelling pensioner population.
A third party is needed. That's where auto-enrolment comes in, tapping into the cash of employers.
The jump to compulsion
Auto-enrolment is a massive gamble for the government.
It has spent £650m on a loan to set up the National Employment Savings Trust (NEST), the low-cost vehicle without which the policy would not be palatable. The Department for Work and Pensions has spent £11m on communications for auto-enrolment alone.
The initiative cannot be allowed to fail, and if ‘nudging' people into savings does not work, compulsory pension saving, such as that in Australia, will be the only way to rescue it.
Compulsion, at first, is an awkward idea. Research from Friends Life published today said a quarter of people would object to compulsory pension contributions, seeing them as just another hated tax like national insurance for the state pension.
However, that viewpoint is flawed. Tax is compulsory in every sense, in that you cannot (legally) choose how much and when to pay.
It is also redistributive, which is what many people hate about it; it is meant to take money from the wealthy to provide for the poor. The standard objection to tax is that it is used to support what some people see as the "undeserving", to use an uncomfortably Victorian phrase.
Two main aspects set compulsory pension saving apart from tax.
First, people would presumably choose how much to save, above a certain limit. For auto-enrolment, for example, this minimum will be 5% from October 2018.
Second, an individual's compulsory pension saving would not pay for anyone else, as the state pension system does.
The government would be forcing people to protect against their own longevity risk, not bail out other people. It is equivalent to the law forcing people to protect themselves against the liabilities arising from their own car use, which is generally accepted as fair.
Pensions minister Steve Webb may believe that nudging is all that is needed, but there is always the risk of apathetic opt-outs and to achieve the maximum amount of individual saving, it is clear that people are crying out for compulsion.
Friends Life's research said that around half of its respondents claimed they would find compulsion useful. In admitting they cannot bring themselves to save they are asking for the government to force them, like a smoker handing their cigarettes to someone else for safe keeping because they know they cannot quit alone.
Ironically, a further 30% of respondents to Friends' research refused to engage with the question of engagement and responsibility itself, and said they had no opinion on compulsory saving at all.
In a landscape where half the potential savers are mired in inertia and a third couldn't care less, compulsion is beginning to seem inevitable.
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