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Retirees in 2034 will live for longer but will face "significant" challenges in achieving an adequate quality of life in retirement, according to a report from the Pensions Policy Institute (PPI).
The retrospective, sponsored by Capita, traced the development of retirement planning since 1974, following a hypothetical family through the years to highlight how pensions have evolved so far and how life for retirees and pension plans will continue to change in the future.
It predicted that by 2034 we will see higher proportions of women, older people and flexible workers in the workforce, as well as increases in contribution rates and impressive advancements in technology.
However, it suggested that rising house prices will lead to an increased proportion of retirees forced to rent their homes.
The study also shone a light on the shift away from defined benefit (DB) to defined contribution (DC) schemes – a move away from a system which provided predictable income based on earnings and length of service towards a scheme which places more responsibility on individuals.
It examined legislative changes, such as the introduction of auto-enrolment in 2012, as well as the ongoing challenges faced by women across the decades, particularly gender wage disparity.
The PPI also called for policy changes to support workers with caring responsibilities to ensure that, as the population ages, the increasing numbers of people with flexible or irregular work patterns can build up adequate savings for retirement.
Finally, the impact of artificial intelligence, and technology more broadly, is predicted to help underpin an evolving pensions industry, delivering guidance and support through more personalised services, the report said.
On the launch of the study, the PPI’s policy researcher, Shantel Okello, said: “This retrospective not only reflects on the past but also poses crucial questions about the future of retirement.
"As we look ahead, addressing the challenges of balancing work and caregiving, improving contributions in pension savings, and ensuring adequate retirement income will become increasingly important.
"It’s essential that policymakers and industry leaders to engage in meaningful discussions and collaborate on solutions that ensure adequate later life outcomes for all.”
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