"Not only are households in debt and struggling financially, but there is still a huge protection gap in the UK. "
Chair of the committee, Nicky Morgan MP, said: “Many households are facing challenges that are putting pressure on the health and sustainability of their finances. Over-indebtedness, lack of rainy day savings and insufficient pension savings are some of the weaknesses in the household balance sheet identified in this inquiry.”
The findings have prompted calls for an overhaul of the savings system, including bringing self employed people into the pension auto-enrolment and scrapping the Lifetime ISA, launched just last year.
But I think another issue needs highlighting here too. Not only are households in debt and struggling financially, but there is still a huge protection gap in the UK. This means there are households who are already struggling to get by who have absolutely no safety net in place should the worst happen.
Various studies have shown the scale of the problem. One, undertaken by The Co-operative and housing and homelessness charity Shelter has revealed that over a fifth (5.41 million) of households in the UK have no insurance protections in place.
There does need to be an overhaul of the pensions and savings market but we also need to have an open debate about why so many people are leaving themselves unprotected.
It is certainly the case that there is a pensions crisis in the UK and that needs to be addressed. We should definitely be having debates about this and talking about what more can be done to encourage people to save for retirement. But we can’t ignore the issue of protection. It’s not just the future that many people are unprepared for, it’s the here and now too.
