Options
However, other ways that countries have tried to mitigate these problems, such as implementing state pension ages and increasing pension information to young people isn’t tackling the biggest retirement risk which is longevity.
One option could be collective retirement schemes, which pool individuals’ pension pots so that investment and longevity risk is shouldered by the group.
This has been trialled in the Netherlands and Canada, where the governments recognise the potential for collective investments to produce better outcomes than individual plans.
However, this is not without problems. How are schemes to ensure poor investment returns are shared fairly between young and older members?
Another prediction for the future of pensions is that there will be greater pressure on schemes to make responsible investments.
According to a recent survey by Share Action, 84 per cent of pension scheme members say they would prefer a pension that uses investments to encourage companies to be more responsible.
Some 68 per cent of 25-34 year olds say it is important for people to use their money for the good of society and the wider world.
Some of the UK’s largest pension providers have committed by 2050 to be "net zero" or neutral on carbon emissions from their main pension portfolios but this is a pace seen as too slow by many climate campaigners.
However, it is a start and something that will need to be factored into the savings conversations we need to have now to help encourage younger people to start saving.
Saksha Menezes is interning with FTAdviser
