Global asset manager Schroders has partnered with the UK’s Pensions Management Institute in an initiative to promote savings amid a projected £350 billion annual long-term savings gap.
The Lifetime Savings Initiative (LSI) is described by Schroders as a project set up to “shine a light on the real challenges facing UK savers”.
The initiative comes on the back of a summit hosted by Schroders in December that identified three areas in need of greater support – financial resilience, rising housing costs and long-term retirement needs.
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According to the research from the aforementioned summit, more than a fifth (22%) of adults are borrowing more money to keep up with living costs, the proportion of pensioner households renting privately during their retirement is set to increase threefold over the next 20 years, and a £350 billion annual long-term savings deficit.
The launch of the LSI also follows the UK government’s Spring budget which included a number of pension and investment reforms.
Schroders and the PMI have described the LSI as a “multi-stage project” which will initially “define and quantify” the extent of the problem before “identifying solutions” and issuing recommendations to policymakers via a white paper to be published later this year.
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Ruston Smith, PMI chair said: “We have identified key pinch points which are preventing people from building financial security in both the short and long-term.
“As this is such an important societal problem, spanning across a number of regulatory regimes, we want to share our insights and take a collaborative approach to broaden the discussion,” said Smith.
James Barham, executive chairman, Schroders Solutions, added: “We hope that the breadth and depth of our panel will help to break down the silos between different areas of the savings system and allow us to build a consensus around what needs to be done to address the key challenges facing people saving today.”
