1. A summary of:
Steps Towards a
“Living Pension”
A practical guide to improving outcomes for
defined contribution pension scheme members

2. 2
1 The story so far…
2 What is a living pension?
3 Are people on track for the retirement they want?
4 Making up the distance to achieve better outcomes
5 A living pension toolkit for employers
What the full report covers
Why read this report?
■■ Because automatic enrolment is a significant step along the way to helping
people achieve the lifestyle they hope for in retirement — but in itself it is not
enough
■■ Because only by understanding how people of different generations think
and feel about the long-term future can employers, trustees and government
successfully engage individuals and help them achieve better outcomes
■■ Because it does not just diagnose the problem; it highlights simple,
pragmatic steps that can be taken to help people achieve the lifestyle they
want in later life — and to ensure that both employer and employees get
value out of their contributions to DC schemes.

3. 3
As the industry and plan participants work hard
to both absorb and implement the full and far-
reaching consequences of recent and ongoing
change, there are still fundamental questions
that remain. What do people actually want
from later life, and what, in their words, does a
good outcome look like? How are they planning
for it? Are they being supported, and if not
what help do they need to manage better?
Claims are often made about the pension gap,
painting an ominous picture of the chasm
that exists between retirement expectations
and reality. But these estimates do not always
start with talking to pension scheme members
themselves. In this report we set out to answer
the above questions and provide a refreshing,
alternative perspective on the issues — from
the members’ point of view.
In one of the most comprehensive studies ever
carried out with defined contribution (DC)
scheme members in the UK, we talked to the
three main generations in today’s workforce,
using both face-to-face interviews and a
national survey, to gain depth and breadth in
understanding retirement hopes and dreams,
and the steps people are taking towards them.
We also explored people’s responses to the
announcements about retirement choices
made in the UK’s 2014 spring budget.
Almost without exception, the people we spoke
to had pragmatic and realistic expectations
for later life. And while there is certainly more
work to be done to help them achieve their
goals, there are some simple and practical
ways in which we can help. In suggesting
these solutions, we have used our behavioural
finance expertise to examine the psychology
behind financial decision-making and how
this could be used to support and encourage
members to save for later life through different
nudges and interventions.
Our intention is that the insights in this report,
and the solutions it explores, offer a critical
next step towards helping people achieve their
retirement ambitions.
Lydia Fearn,
Head of DC Investment
Consulting, Barclays Corporate
& Employer Solutions
Overview of the report
“I would like to be healthy enough to retire and
have enough finances to look after myself, the wife,
the family and the grandchildren, nothing more,
nothing less really, just to be nice and comfortable.”
[Baby Boomer]

4. 4
Required contribution to achieve a living pension
(taking into account the income they can expect to get from the state pension)
For someone starting
at age 22 today,
this rises to 13%
12%
11 21
Baby Boomer
(age 54-69)
(age 34-53)
(age 19-33)
Generation X
Generation Y
£190£50£50per month per monthper month
Y X B
Amount of money it would take to make up the difference
(on average from the 8% auto enrolment default rate)
+ 5 years
* * *
Baby BoomerGeneration XGeneration Y
%%
How on track for retirement are the
UK workforce generations?

5. 5
63%
£23,400
£29,000
£27,600
8%
7%
9%
£18,50
0
£17,40
0
£17,40
0
79%
60%
Current average annual salary
Proportion of
current income
needed for “must
have” later lifestyle
(implied replacement ratio)
Annual income needed for
the “must have” later
lifestyle they describe29
Average contribution
now from self and
employer
60
70
80
* auto enrolment
will mean employers contribute
3%, so Generation Y employees
should contribute 7.2% and
then the last 1.8% is from tax
relief to get to a 12%
contribution rate (for a basic
rate tax payer)
* auto enrolment will mean
employers contribute 3%, so
Generation X employees should
contribute 6.4% and then the last
1.6% is from tax relief to get to a
11% contribution rate (for a basic
rate tax payer)
* Baby boomers
(age taken as 59) have only seven
years until retirement so
additional contributions make
very little difference to their end
pension incomes. They would
need to contribute 62% to get on
track (for a basic rate tax payer).
But if they worked for five extra
years that goes down to 21%.

6. 6
Here we suggest a number of steps, all of which Barclays Corporate & Employer Solutions
can help you with.
We understand that it is not just individuals that feel under pressure. Automatic enrolment
has significant cost and time implications for employers. This toolkit outlines different levels
of support that employers could provide for their employees. While some employers may be
able to complete all four stages, we understand that for others, achieving just stage 1,
or stage 1 and 2 may be more realistic.
A toolkit for a living pension for
your workforce

7. 7
Three steps towards a
living pension
It is clear that helping people to achieve better
outcomes from their DC pension in order to
achieve the lifestyle they want in later life will
require action from the individual themselves,
from the government, from employers, and
from all the other parties involved in the
DC landscape, including trustees, pension
providers and financial advisors.
So why should we bother? The financial
benefits for individuals in later life are
paramount, but the benefits are emotional as
well as financial — knowing there is a sufficient
plan in place reduces anxiety and stress and
gives people peace of mind throughout their
working life.
As an employer, providing support to your
employees is important for the psychological
contract between them and you — with
the potential to boost loyalty, morale and
motivation, ensuring you get good value out of
the investment you make in pension provision.
And for government the case is clear:
Financially insecure populations are in
no-one’s interests. Better outcomes for DC
members mean better outcomes for us all;
they are part of a sustainable economy.

8. Legal note
While every effort has been taken to verify the accuracy of this information, neither The Futures Company, Ipsos MORI nor
Barclays can accept any responsibility or liability for reliance by any person on this report or any of the information, opinions
or conclusions set out in the report. This document is intended solely for informational purposes, and is not intended to be a
solicitation or offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or to
provide any investment advice or service.
This item can be provided in Braille, large print or audio by calling: +44(0)1624 684 444* (or via TextDirect if appropriate).
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© Barclays June 2014 All rights reserved.
Item Ref: IBIM3483 July 2014
The full report, Steps Towards a “Living Pension” is
available from Barclays:
Lydia Fearn
lydia.fearn@barclays.com
Tel + 44 (0)20 3555 8330