The Queen's 90th birthday throws into sharp perspective the changes that have taken place in our retirement system.
Ninety years ago, saving for a pension wasn't even a consideration. Then came the 1960s, when people began living longer and the concept of 10 years' retirement after the age of 60 became possible. For several decades after, many people could count on employer or state support for a decent retirement.
Fast-forward to today, and the pensions system has gone through decades of full support for the over-60s, to a situation where the onus is now on the individual to support themselves in old age.
“When the Queen started her first job aged 26, a conversation about how much she would like to contribute to her pension wouldn’t have taken place,” says Andrew Story at eValue.
If she were the average worker today, the Queen would be joining the 6m people who are being auto-enrolled into a workplace pension scheme, contributing the minimum 1 per cent of her salary alongside a further 1 per cent from her employer. That figure would rise to a total of 8 per cent from salary and employer in 2019, in line with auto-enrolment rules.
Although auto-enrolment is getting millions more people saving for retirement, these contribution levels have been criticised as being too low to secure a decent retirement.
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Storey uses the income level of the average Briton to illustrate how much a person would have to live on in retirement after a lifetime of saving 8 per cent of their salary for retirement.
“Assuming that over her career the Queen earned an average UK salary of £26,500 and decided to contribute 8% to her pension through auto-enrolment, at her retirement age of 68 she’d have an average income of £18,000 per year, including her state pension,” Storey explains.
“If she wanted to enjoy substantially higher earnings in retirement she’d have to save a considerable amount more!”