This is a massive issue - and has been one for a while. Employees across the UK desperately need to be saving for retirement.
Auto-enrolment will do a lot to help the situation. The system has been (and is being) steadily rolled out to all employers across the UK, requiring bosses to make sure that workers are automatically enrolled in a pension scheme to which both the worker and the employer will contribute - in a sense, pensions will become 'opt out', rather than 'opt in'. The Department for Work & Pensions has estimated that this would lead to up to £16bn extra pension saving per year by 2020.
But auto-enrolment is unlikely to be enough. At best, it will only require employers to make relatively small contributions to pensions - a minimum of 3% at its peak. Additionally, the state pension scheme is far from gold-plated. When looking to the future, it is impossible to predict what reforms a government in 10, 20 or 30 years may make to that scheme - in an environment of auto-enrolment, where the vast majority of workers have built up some form of retirement savings, it may well be that a future government starts to scale back the state's contribution, pushing more and more of the burden onto the employee.
To be fair, I won't criticise too harshly those who are not thinking about retirement funds - especially young workers new to the job market. We have grown up in the belief that state pensions will provide the lion's share of what we need to retire on, but I don't think that will hold true any more. A 'pay as you go' state pension system - one that relies on people of working age funding retirees - simply will not be able to cope with the burgeoning retired class. Regardless of the fact that you might have paid for your parents' and grandparents' retirement, the simple truth now is that, if you want to retain the same quality of life, the burden is going to be almost completely on your shoulders.
More than three quarters (76%) of employers do not think their employees are saving enough for retirement Hargreaves Lansdown's research found that 76% of respondents thought the best way to deal with low contribution levels would be to educate their employees on how much they need to save. Just under half (46%) thought that the government should increase minimum contributions further. Employers adopting systems allowing employees to automatically increase contributions each year was selected by 31.9%.