The creation of a savings culture is necessary in order to overcome the impact of longevity on lives and savings, such as the amount employees put aside for retirement.
Speaking at the National Association of Pension Funds (NAPF) Investment Conference on 5 March, Larry Fink, chairman and chief executive officer of BlackRock, said: “We need people to save more and save earlier.
”Even with positive steps, such as the National Employment Savings Trust (Nest) and auto-enrolment, there is too much risk people will opt out or not save enough into a plan.”
He added that this should apply to all social groups, including those on lower incomes.
“We need to create a culture of saving whether [someone is] borderline poverty or not,” he said. “Saving should be a necessity and part of our mindset.
”We need to find a way to make savings a priority of life. I believe a mandatory savings scheme [even with contributions of 1%, 2% or 3% of salary] is better than the minimum wage.”
However, he added that policies are needed to increase pension savings.
To achieve this, employers, providers, asset managers, trustees and government must work more closely together on key issues, such as pension scheme outcomes and how to meet pensions promises and obligations.
