The Lifetime Savings Initiative
Tackling the challenges faced by the typical UK citizen in their efforts to manage the day-to-day, whilst working to secure their financial future.Our Mission Statement
To look across the entire UK savings system and identify actionable recommendations for industry and policy makers that solve key pinch points preventing people from being able to secure their financial future, and in doing so, create a more sustainable national lifetime savings model.
The lifetime saving system is becoming increasingly strained…
People's financial situations are worsening
11% of adults are in financial difficulty, a 33% increase from 2022. In addition, 67% of renters do not have enough savings set aside to cover 3 months’ worth of essential outgoings. (Source: FCA FLS 2023)
Homeownership is becoming more unattainable
Over the last 20 years, homeownership in the UK has fallen from 71% to 64%, with younger age-groups experiencing the fastest declines. The average age for first time buyers is now 34 years old. (Source: ONS 2022)
Under-saving for retirement is a generational issue
71% of 'baby boomer' households are predicted to reach the PLSA moderate retirement standard. This figure falls to only 3% of millennial households. (Source: The Peoples Pension 2022)
People lack a financial buffer to weather shocks
24% of UK adults have less than £1,000 in savings. Recent studies show that having a £1,000 buffer cuts your chances of falling into debt by almost a half. (Source: FCA FLS 2022, StepChange 2017)
Pension contribution rates need to double if renting during retirement
To cover rental costs during retirement, the median 22-year-old needs to save an extra 9% per annum into their pension (over their working life) compared to someone who will own their own home. (Source: Schroders 2022)
Opportunity for greater returns is being missed
34% of savers keep most of their cash in a current account. Of adults with more than £10,000 in investible assets, the majority hold at least 75% in cash. (Source: Building Societies Association 2023, FCA FLS 2022)
Financial Resilience
People are struggling to meet their day-to-day needs and are increasingly unable to weather short-term financial shocks.
Pinch points:
- Falling into financial difficulty and debt spirals
- Growing dependency on credit
- Difficulty building up ‘rainy day’ savings
Housing
Both upfront and ongoing housing costs, for renters and homeowners, are becoming an increasing financial strain.
Pinch points:
- Buying a house is becoming unaffordable
- Ongoing housing costs are a financial strain
- Homeownership has a big impact in retirement
Long-Term Savings
There are increasing concerns that people are not accumulating enough wealth to enjoy a moderate standard of living during later life.
Pinch points:
- People are struggling to navigate the current system
- Savers are not getting the most out of their money
- People do not accumulate enough for retirement
“The Lifetime Savings Initiative is a crucial endeavour that sheds light on the challenges faced by ordinary UK citizens in their quest for financial security. Our report reveals the daunting barriers that individuals encounter when attempting to manage debt, achieve homeownership, and save for their future. By highlighting these shocking realities, we aim to drive awareness and foster a collective effort to create a more equitable and sustainable national lifetime savings model.”
Executive Chairman, Schroders Solutions
Watch: LSI Introduction and Panel Discussion
Watch a short introduction to the LSI, followed by a panel discussion with Schroders, the Pensions Management Insititute, and TISA (the Investing and Savings Alliance) summarising some of the key challenges faced by UK citizens as they navigate their lifetime savings journey - touching on affordability, financial literacy, complexity and behavioural biases.
Discover the Lifetime Savings Initiative Report 2024
Download the Lifetime Savings Initiative Report which maps the key pinch points facing UK savers.
The Lifetime Savings Initiative, led by Schroders and The Pensions Management Institute, brings together industry leaders from across the savings and pension landscape.
Contact us
For all general enquiries, please do not hesitate to get in touch with our dedicated LSI Project Team.
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Issued in March 2024 by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered in England, No. 4191730. Authorised and regulated by the Financial Conduct Authority.
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