This article is from Maxine Kelly from the Financial Times it was, published on 3rd July as “breaking news”.

The headline is  familiar to anyone who’s read the Pension Commission in May; but it’s “breaking” to most readers of the FT. Many of course will be the 1 in 10 if they don’t read the FT but Maxine and Pensions UK are the readers of the FT!

London as we’ve known it recently! A very hot place outside and inside  City offices! Pay is not what it once was and that goes for funding retirement income.

The headline is  familiar to those who have read the Pensions UK on pensions,  published in June- a  little later than the Pension Commission in the year.

The data, calculated for Pensions UK by the Centre for Research in Social Policy at Loughborough University, forecast that around four in five people (82 per cent) of the working population would reach the minimum standard of living in retirement, while only one in five (23 per cent) would retire with a moderate standard of living.

“This is out of step with what some people expect for their retirement,” said Zoe Alexander, executive director of policy and advocacy at Pensions UK.

It poses the same question about adequacy but here the Pensions Commission and the Pensions UK diverge. While the Pensions Commission is concerned with poverty in later life, the one in ten identified by the Pensions UK are those well enough off to be comfortable in retirement.

“While many people will reach a ‘minimum’ standard of living, far fewer are on track to achieve the more moderate or comfortable retirement most say they want,” she said.

“That gap is particularly pronounced for those on middle and higher incomes, who often expect to maintain something close to their working-life lifestyle but are not saving at levels that make that realistic.”

Pensions UK estimate

that a comfortable retirement would require a pre-tax income of £54,720. When taking the non-means-tested state pension into account, this means the saver would need a DC pot of between £560,000 and £845,000. For a two-person household, each person’s pot would need £315,000 to £470,000.

Add to this the £200,000 that the Pension Commission say will need to be put away to deal with housing (not included in Pensions UK money) and you can see why being a millionaire in pensions term, only gets you “moderately well off” as you grow old.

Here are two ends of the same problem; the rich person’s adequacy and the poor person’s.

Zoe calls for employers to increase matching so that those who have spare cash can be incentivised ; while the Pension Commission consider how those who have no spare pay can be accommodated.

Employers who typically pay nothing but a basic contribution against the minimal band of earnings don’t reckon “pensions” count for much.

For the people who are low earners contributing , tax incentivises does not count, many are in net pay which pays them no incentive at all (they will at last get something back later this year). Employers with these net pay schemes are actually underpaying actual contributions; they include Government schemes all of which are paid under net-pay.

The inadequacy in retirement for those who have been rich is different than the inadequacy for those who have been poor in terms of money but they end up feeling much the same.

The problem for employers is that they too may feel inadequate to pay voluntary contributions and will consider any further compulsory contributions to pensions an extension of national insurance payments (by another name). It is unlikely that a Government wanting to stay within the Fiscal Rules is going to risk being accused of backdoor targets.

I can see only two things that can and are being done.

The first is to continue to accelerate the State Pension through the triple lock,  The state pension forms the foundation of adequacy for those on lower incomes

Secondly the Government’s further work on CDC which started with Royal Mail, now is introducing working place CDC schemes and will end up later id the decade with options for CDC to be boulted into DC accumulation. Eventually we may see ways for savers to transfer their DC pots to CDC without the door being opened by an employer.

These two advances will be complimented by a half-way house between the flexibility of wealth and CDC is the default retirement pathway. This will be the major achievement of the Pension Schemes Act.

All these variants are aimed not at the well or even moderately well off but for those who want pensions above wealth and who cannot afford more money to be paid into pensions.  Many on lower income than those who read the FT,  can hope that pensions that they pay into offer them a better wage in later life, one that makes pensions a little more adequate. Low earners have the same problem as FT readers, but low-earners don’t have a buffer to fall back on ;  pensions must get better.