Do as you are told! You will save for retirement!

I don’t know about you but when I am being pressured to do something I am equally as inclined to resist that pressure as I am to go with it.

My wife puts this down to me being ‘stubborn’; I am not going to argue as that is probably true.

Interesting to read yesterday that Policy Exchange (a right of centre think tank) has said that saving for retirement should be “an obligation that falls on everyone in society”.

As well as backing the recently introduced policy of Auto Enrolment into pension schemes, Policy Exchange believes the right to opt-out should be removed and savers forced to pay up to 12% of their pay into a pension plan.

Of course there is little point in arguing that those who can do should save for retirement.

We are living longer, the cost of living never gets any cheaper and converting a pension fund into income produces far less these days than used to be the case.

Forcing people to save at those kind of levels though is probably something that a lot of people would try to resist.

I am not convinced that compulsion is much of a vote winner though and few politicians would have the nerve I suspect to support it.

However, it is worth dwelling on the fact that the average pension pot is estimated to be £36,800 whilst it takes closer to £240,000 to generate the recommended retirement income of £16,200 per year.

By any standards that is a huge gap to fill but I wonder if compulsion is the answer?