Financial Conduct Authority chief executive Andrew Bailey has warned of a ‘substantial’ inter-generational savings issue as the regulator has found 15 million people are not saving into a pension.
The FCA’s Financial Lives survey, which will be published in full later this morning, has found there are 15 million adults who have not retired and are not saving into a pension.
A big percentage of this is likely to be the self-employed who are not currently covered in auto-enrolment (although the government plans to change this) and account for 5 million workers according to the Pensions Policy Institute.
But in an opinion piece in the Mirror, Bailey also said the younger generation is facing constraints which are stopping it saving, with ‘11% of 18-24 year olds and 13% of 25-34 year olds having missed paying bills or credit repayments in three of the last six months’.
Bailey also spoke last night at the Mansion House where he again warned of the dangers of under-saving for the younger generation which have arisen because of a shift in responsibility from the employer to individuals.
‘This has in the last decade been accompanied by conditions of very low real interest rates which have substantially increased the cost of long-term saving and led to conditions where there is real concern that for many people, and particularly younger people, the retirement saving rate is too low. But, to be very clear, this is not a criticism of younger people. We have a substantial inter-generational saving and asset-ownership issue on our hands today.’