Why don't we save? Because we don't have the money

The biggest reason for a failure to contribute to pension plans is not having the money to do so.

Aviva, the insurance firm, has released its second Working Lives report, analysing the sort of benefits businesses give their employees. One particular passage jumped out at me:

Almost half (45%) of employees who do not contribute to a scheme they are offered say they simply cannot afford it, 19% are repaying debts and 17% are saving for other things. Of interest, the number of workers who say they cannot afford to pay into a scheme has dropped 10 percentage points from 55% (Q2 2012) which suggests that while general finances remain tight, retirement saving is becoming more of a consideration.

The problem that Britons don't save for retirement plagues public policy, and novel solutions are forever being proposed. For instance, one of the responses to this report, from ILC-UK, called for Government and the pensions industry to "work together to develop and promote a savings rule of thumb similar to the ‘5-a-day’ healthy eating message."

But if Government needs to do one thing to boost the number of Brits saving for retirement, it's pretty clear that that one thing ought to be aiming to increase the incomes — or at least, the disposable income — of the poorest 45 per cent of the country. It's not a lack of responsibility that prevents them saving, it's a simple lack of funds.

(It's similarly not a lack of responsibility that a 19 per cent of employees decide to pay off debts rather than save in a pension; saving when you have interest-bearing debts is, as a rule of thumb, a stupid thing to do)

Those figures also only count for employees with a workplace pension scheme, an increasingly rare situation to be in. Such schemes typically involve employer matching of contributions, which makes it even more critical that employees feel they can afford to actually take the employer up on the offer. As with other in-kind compensation like healthcare or company cars, such benefits are usually a way for an employer to "top up" an otherwise-low salary. If it is disproportionately poorer employees aren't making the most of them, that hurts them twice over.

Of course, whether employees think they can afford to contribute into pensions is different from whether they can actually afford to. It may be that if the urgency of saving for retirement were properly impressed upon employees, they would be able to make savings in their daily lives elsewhere. But that's a very different proposition from merely reminding people that they ought to be saving more.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Benn vs McDonnell: how Brexit has exposed the fight over Labour's party machine

In the wake of Brexit, should Labour MPs listen more closely to voters, or their own party members?

Two Labour MPs on primetime TV. Two prominent politicians ruling themselves out of a Labour leadership contest. But that was as far as the similarity went.

Hilary Benn was speaking hours after he resigned - or was sacked - from the Shadow Cabinet. He described Jeremy Corbyn as a "good and decent man" but not a leader.

Framing his overnight removal as a matter of conscience, Benn told the BBC's Andrew Marr: "I no longer have confidence in him [Corbyn] and I think the right thing to do would be for him to take that decision."

In Benn's view, diehard leftie pin ups do not go down well in the real world, or on the ballot papers of middle England. 

But while Benn may be drawing on a New Labour truism, this in turn rests on the assumption that voters matter more than the party members when it comes to winning elections.

That assumption was contested moments later by Shadow Chancellor John McDonnell.

Dismissive of the personal appeal of Shadow Cabinet ministers - "we can replace them" - McDonnell's message was that Labour under Corbyn had rejuvenated its electoral machine.

Pointing to success in by-elections and the London mayoral election, McDonnell warned would-be rebels: "Who is sovereign in our party? The people who are soverign are the party members. 

"I'm saying respect the party members. And in that way we can hold together and win the next election."

Indeed, nearly a year on from Corbyn's surprise election to the Labour leadership, it is worth remembering he captured nearly 60% of the 400,000 votes cast. Momentum, the grassroots organisation formed in the wake of his success, now has more than 50 branches around the country.

Come the next election, it will be these grassroots members who will knock on doors, hand out leaflets and perhaps even threaten to deselect MPs.

The question for wavering Labour MPs will be whether what they trust more - their own connection with voters, or this potentially unbiddable party machine.