This amounts to 2.1m people who do not know when they will be able to retire due to a shortage of income or failure to make any pension provision.
Over a third (36%) have no pension planning in place at all and are entirely reliant on the State Pension.
The picture has changed quite significantly over the last five years due to increasing longevity and the impact of the financial crisis on returns.
Clearly auto enrolment is a step in the right direction but even those in pension schemes will have seen their returns affected by the financial crisis and may need to work longer to see their funds recover in value.
The introduction of taxation on pension funds will also have acted as a brake on returns, as withholding tax on dividends can no longer be reclaimed.
It is in the area of pensions that Jersey makes a significant contribution to millions of UK policyholders and scheme members. As returns have become increasingly difficult to come by, interest in alternative investments has grown.
Today many pension schemes permit investment of between 5% and 8% of their available funds into ‘alternates’, usually real estate, commodities, hedge funds and private equity. These supposed higher risk investment have often been less volatile than many traditional investments during the crisis and have served to enhance the returns on retirement savings.
The role of Jersey as a specialist centre in this field is to provide a tax neutral platform where the underlying pension funds are not taxed and can be pooled from different pension providers who are often based in a wide number of different countries. This process is much simpler and less expensive if structured through Jersey.
The funds are then directed by investment professionals into higher growth opportunities often outside the home country of the pension saver.
The effect is to boost retirement savings and eventually the pensions of ordinary working people. The funds ordinarily are not subject to either capital gains or income tax when invested, so the benefit of using Jersey is to create efficient pools of capital that can be put to work to benefit the real economies of the countries they are invested in, and to boost the savings of those planning their retirement.
Jersey is instrumental in helping millions of ordinary savers provide for a better retirement.