Over half (54 percent) of MPs believe State Pension age will have risen to 70 by 2044. Over eight in ten (83 percent) of Labour MPs think the Budget reforms will result in a greater proportion of people relying solely on the State Pension. Six in ten MPs (61 percent) think automatic enrolment pension contributions need to rise at some point in the future.
As the Autumn Statement when George Osborne announced further changes to the pension system, research conducted by YouGov on behalf of workplace pensions provider NOW: Pensions* reveals that nearly one in six (15 percent) MPs don’t expect there to be a State Pension 30 years from now, or if there is one, it will be at a considerably lower level. However, almost half (46 percent) are confident that there will still be a State Pension three decades from now. Of the 100 cross-party MPs surveyed, Conservative MPs proved to be more pessimistic than Labour MPs overall with nearly twice as many (13 percent) believing that the State Pension will be non-existent or significantly lower compared to Labour MPs (7 percent). Of those who do believe there will be a State Pension in 30 years’ time, over half (54 percent) think the State Pension age will have risen to 70. This percentage increases to 65 percent amongst Conservative MPs and is slightly lower amongst Labour MPs (52 percent).
Labour fears over Budget reforms
Over a third (34 percent) of all MPs surveyed say they don’t feel confident that post-Budget, savers will be able to manage their money well enough to ensure that the money stretches throughout their retirement. This fear is much greater amongst Labour MPs with nearly two thirds (64 percent) lacking confidence compared to just 6 percent of Conservative MPs. A staggering nine in ten (92 percent) Conservative MPs are confident that savers will be able to manage their money well enough to ensure that it lasts as long as they live.
Greater reliance on the State Pension
Over half (54 percent) of all MPs surveyed think the Budget reforms could result in a greater proportion of people relying solely on the State Pension to fund their retirement. This rises to 83 percent amongst Labour MPs and falls to just 29 percent amongst Conservative MPs. Of those who expect a greater reliance on the State Pension, seven in 10 (69 percent) are concerned about this prospect with only 8 percent unconcerned.
Lack of confidence in the guidance guarantee
Over half (51 percent) of all MPs surveyed aren’t confident that the guidance guarantee – the Chancellor’s commitment to provide savers with defined contribution pensions access to free, impartial advice – will be in place by April 2015. Labour MPs are more pessimistic with 84 percent lacking faith in the provision of the guidance guarantee compared to just 17 percent of Conservative MPs.
Widespread consensus that auto enrolment contributions need to increase
Six in 10 (61 percent) of the MPs surveyed believe that while auto enrolment minimum contributions are sufficient at the moment, they should be increased at some point in the future (58 percent Conservative versus 66 percent Labour). Nearly one in ten (8 percent) of all MPs believe auto enrolment minimum contributions should be increased now (7 percent Conservative versus 8 percent Labour). Just over one in 10 (13 percent) think the current contribution is sufficient (12 percent Conservative versus 13 percent Labour).
Morten Nilsson, CEO of NOW: Pensions said: “In the corridors of power there is a worrying degree of scepticism that the State Pension can be maintained over the long term.“With the future of State provision so uncertain, it’s never been more important for young savers to take control of their own pension saving and put aside as much as they can to help protect themselves against an uncertain future. “Auto enrolment has a key role to play in plugging the savings gap but MPs agree that contributions need to rise beyond current levels to give Generation Y any chance of an adequate retirement.”