For my first few jobs, I paid the default amount into the workplace pension. Sometimes that was employer match, sometimes that was the auto-enrolment amount. It feels like that’s retirement sorted. After a decade of working, I thought I’d be a good way towards retirement, but when I finally gave a proper read of my pension statement, I wasn’t any anywhere near as close to ‘done’ as I was hoping.
The problem is that the ‘default’ is supposed to be the minimum, not job done.
It feels like it’s enough, but it isn’t
The auto-enrolment system feels like it was designed to make sure we all have enough money when we retire. Tick a box when you join the company and that’s it, retirement sorted. A lot of people opt out, so we feel as though we’re doing the right thing.
That’s not how it was designed though. It’s quite a new system, and it was a government response to a system where most people were saving nothing. It was designed with two aims in mind: get people saving something, and don’t bankrupt the companies that we’re forcing this on to.
It was never designed to be a ‘this is enough for retirement’, even though that’s how our instinct reads it. It’s a way to get people into investing, and provide a baseline to keep people out of poverty. You’ve hopefully got that baseline, so this is what we build from.