Private workers to get guaranteed pension income for life in bid to close savings gap

Private sector workers are set to be given access to guaranteed pension income for life, as the government aims to close the retirement savings gap between the public and private sector. Under new plans set out by pensions minister Torsten Bell on Tuesday, providers will be required to offer workers an annual income as standard in retirement. The plans, dubbed ‘Guided Retirement’, will “resurrect” the option of having an inflation protected pension that provides a secure income for private sector retirees. Roughly 17m workers who are saving into a default pension will be given the option. DB guarantee The move is anticipated to bring retirement savings in the private sector closer to that of the public, where workers typically have a defined benefit (DB) pension. DB schemes guarantee employees a regular, lifetime income upon retirement calculated by length of employment and salary. This differs to private defined contribution (DC) schemes where a worker’s retirement f