Pension reforms needed to help people through retirement

09 Apr 2025

Reforms are needed to make the pension system easier to navigate successfully in order to help reduce the risk of a shortfall in retirement, according to the Institute for Fiscal Studies (IFS).

The think tank says that private sector employees are increasingly accumulating retirement savings in 'defined contribution' (DC) pensions (pension pots that do not guarantee a regular income through retirement).

Since 2015, people over 55 have been able to withdraw money from DC pensions in any way they choose.

According to the IFS, as this form of wealth becomes more important, people face too many complex and risky decisions through retirement.

This increases the risk that many exhaust their private resources and fall back purely on state pensions and benefits, especially later in retirement, the think tank added.

Bee Boileau, Research Economist at the IFS, said: 'The forthcoming Pension Schemes Bill is expected to introduce default retirement income solutions. Done well, these should improve outcomes for many, given the risks many face when drawing down pension savings through retirement at present.

'But key questions remain – in particular, there will be some for whom a retirement income default will not be right. The government and pension providers must ensure that it is straightforward to opt out of whatever new defaults are introduced, and that as far as possible those making these decisions are sufficiently informed and helped.'

Environmental Policy | Privacy Notice | Accessibility | Disclaimer | Help | Site map | © 2025 Davis Bonley Limited. All rights reserved.

Davis Bonley, 137 Watling Street, Radlett, Hertfordshire WD7 7NQ , Davis Bonley is a trading name of Davis Bonley Limited, 137 Watling Street, Radlett, Hertfordshire, WD7 7NQ. Company registration number 08989322. Regulated as auditors and regulated for a range of investment business activities by the Association of Chartered Certified Accountants. Awarded approved employer status for Association of Chartered Certified Accountants trainee and practising certificate development.

We use cookies on this website, you can find more information about cookies here.

A Diversity Summary is available upon request.

Payroll Services Barnet