Consulting Report
07 Feb 2024

Exploring the implications of higher pension contributions in the UK

In collaboration with Royal London

Exploring the implications of higher pension contributions in the UK

Most private sector employees fail to save adequately for retirement, despite the implementation of automatic enrolment and recent legislation to expand the scope of this scheme. In this study, Oxford Economics has collaborated with Royal London to assess the impact of a range of mandated pension contribution increases at the household and macroeconomic level.

Our analysis indicates that only 40% of households with a pension in a defined contribution (DC) scheme will be on track for a “moderate” lifestyle in retirement by 2040. We show that higher pension contributions could improve the adequacy of pension savings and boost UK GDP by £0.4 to £7.4 billion in 2040, compared to our baseline. However, we also highlight that poorer households may find it challenging to afford higher pension contributions―an important consideration for any potential policy reform.

The experts behind the research

Our economic consulting and macro consulting teams are world leaders in quantitative economic analysis and original, evidence-based research, working with clients around the globe and across sectors to build models, forecast markets, run extensive surveys, and evaluate interventions using state-of-the art techniques. Lead consultants on this project were:

Ben Skelton

Lead Econometrician, Economic Consulting

Henry Worthington

Director, Economic Consulting

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