How to make pension saving palpable

5th March 2020

AHC, a Gallagher Company, recently supported the Pensions and Lifetime Savings Association (PLSA) on the design and build of its new Retirement Living Standards website, which aims to cut through the ambiguity that currently surrounds retirement planning, to help UK savers achieve better outcomes. Here, Francis Goss talks about goal setting, why it’s the answer to the future we want – as opposed to the future we’re able to get – and what role employers have to play.

Mark Twain once said: “life would be infinitely happier if we could only be born at the age of 80 and gradually approach 18”. It’s a given that through maturity we become focused on our long-term futures. Consequently, trying to engage anyone under the age of, say, 50 in putting money aside for their retirement is like trying to convince children to eat their vegetables.

It’s an age-old pensions conundrum.

Something’s got to give because a failure to plan can bring devastating consequences. For individuals, and for their employer.

Consider this. Two people joined the same company over 40 years ago at the age of 19. One immediately opted out of the employer’s Final Salary pension because he thought that pensions were for old married people and he was young and single. The other stayed in the scheme because his Dad advised him to. The latter recently retired with a tax-free lump sum large enough to pay off his mortgage, and the former will have to work for at least another ten years. This is a true story.

This is obviously a sad – yet all too familiar – tale for the individual who opted out, but what does it also say about his employer? What’s the point offering a really nice benefit if people don’t get anything from it?

And if the employer isn’t doing anything to promote financial resilience – and, in turn, mental wellbeing – what does that say about their overall organisational wellbeing? The latter representing the one thing that has the power to improve recruitment, retention and productivity.

It’s time organisations understood why it’s important to communicate retirement saving.

Employers wouldn’t dream of failing to communicate the fire escape policy. Why? Because there’s a potential but very real consequence if they don’t. The same thought process needs to be applied to pension communication. There’s a consequence to individuals and to business.

Thankfully, help is at hand. And it comes in the shape of goal setting, the guiding principle behind the PLSA’s Retirement Living Standards.

One of the biggest challenges with saving for retirement is that it’s a nebulous number. How on earth do you know how much you’re going to need? Compare this with other typical big spends in life – say a kitchen extension. You have an idea what you want it to look like, you get a quote based on that idea and then you save until you have enough to realise your goals, or indeed secure finance.

For the first time, researchers have translated future retirement goals into something equally tangible and do-able.

Loughborough University’s Centre for Research in Social Policy and the PLSA have calculated how much money a person needs every year – whether single or part of a couple – to enjoy a minimum, moderate or comfortable quality of life when they retire.

Based on consultations with members of the public, they’ve taken into account what’s needed in retirement for things like household bills, personal goods, home maintenance, holidays, food, transport, clothing and social activities.



Single £10,200 a year / Couple £15,700 a year

Covers all your needs and leaves you with a bit left over for some fun – i.e. holidays consisting of a week and a long weekend in the UK each year and the ability to go out once a week.


Single £20,200 a year / Couple £29,100 a year

A step up from minimum, allowing you more financial security and flexibility – i.e. a 2-week holiday in Europe and a long weekend in the UK each year, plus eating out a few times a month.


Single £33,000 a year / Couple £47,500 a year

Another step up, giving you some luxuries – i.e. a 3-week holiday in Europe each year, regular beauty treatments, nights out and theatre trips.


Assuming an individual’s National Insurance contributions are up to date, they’ll get a full state pension of £8,767 a year, so they’ll only need an additional £1,500 a year to hit the minimum.

The PLSA wants the Retirement Living Standards to become common parlance over time. And, in the spirit of goal setting, it’s hoping for pension schemes representing 90% of active savers to adopt the Standards by 2027.

To support the goal of widespread adoption of the Retirement Living Standards, AHC, a Gallagher company, has designed an interactive modelling tool – known as ‘Hitting the Target’ – that helps people to build a picture of their future retirement, and the income they’ll need to achieve it.

None of us has the benefit of foresight. But the PLSA’s Retirement Living Standards represent the next best thing. And if smarter employers help champion the Standards, hopefully fewer people will be wrestling with hindsight when it’s far too late.

Francis Goss

Director, Organisational Wellbeing Consulting – Gallagher UK

Back to the blog

Case Studies