The ‘moderate’ and ‘comfortable’ levels of the Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards (RLS) are becoming unrelatable as people find it increasingly difficult to save enough for retirement, pension professionals have warned.

Addressing the PLSA Local Authority Conference, TPT Retirement Solutions DC director, Philip Smith, highlighted the firm’s use of the RLS as an engagement tool, explaining that the standards effectively provided a simple rule of thumb that people were able to understand.

However, he said that the majority of TPT’s membership were heading for somewhere between the ‘minimum’ and ‘moderate’ levels of the RLS, with most being on the lower end.

“When you are thinking about communicating with people, if you’re talking about a comfortable lifestyle that requires a gross income of over £50,000 for a single person, or a pot of £770,000, that’s definitely not relatable to most people,” he stated.

“Even a moderate income for a single person requires a DC pot closing in on £500,000. Managing expectations is key, and focusing on what is achievable is really important, and likely to drive greater engagement from members.

"Those ‘moderate’ and ‘comfortable’ lifestyles are becoming unrelatable for some people."

Shropshire County Pension Fund pensions administration manager, Vicky Jenks, agreed, saying that the RLS and how they are communicated to members have to be relatable to promote engagement.

“If people can’t relate to it, they are not going to pay attention to it,” she continued.

“How many people fall in that comfortable bracket? Or do we want to step away from that a little bit and try and point out to our membership the more realistic minimum/moderate terms?”

The session was chaired by PLSA chair and Aviva director, workplace savings and retirement, Emma Douglas, who said that the RLS were an “evolving picture” and hinted at the PLSA potentially adapting the standards to meet the changing landscape.

“If we are finding that it might be helpful to have a midpoint between minimum and moderate, then that’s the kind of feedback we want to get,” she added. “It’s what makes this usable and relatable.”

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