There is widespread recognition that UK households have saved insufficiently in the past. The financial resilience of many was low when the 2008 recession struck and the chronic problem of under-saving for old age continues. It has been estimated that nine million people are under-saving for their retirement.
Tackling the UK’s low savings problem is a long-term challenge. An effective policy response requires taking a long-term perspective. Policy-makers need to think about the combined impact of the many seismic forces that will shape the savings environment over the next two decades.
This report of an SMF scenario-planning exercise elucidates the evolving policy challenges. The report highlights important emerging tensions that policy-makers will need to address – now and in the coming decades – to re-build households’ financial resilience and ensure that individuals save adequately for later life.