IFS Pensions Review final report proposes major reforms to build a future-ready pension system
The Institute for Fiscal Studies (IFS) has published its final Pensions Review report outlining its recommendations for reforms to the UK pension system. Drawing on research spanning over two and a half years, the report presents a detailed roadmap for reform that tackles what it calls significant challenges operating within the UK pension system and the financial risks impacting future generations of pensioners. Policy recommendations include a four-point state pension guarantee linking future increases to earnings and longevity, mandatory 3% employer pension contributions for all employees aged 16–74, and new mechanisms for self-employed pension contributions through Self Assessment. The proposals also recommend automatic consolidation of small pension pots especially for those approaching (or above) state pension age, facilitating flexible but protective default retirement income products such as ‘flex then fix’ approaches combining the flexibility of ‘drawdown’ with the security of annuities, and also ensuring savers have free access to high-quality information and support similar to Financial Conduct Authority's targeted support proposals.