New research indicates lazy Brits have only themselves to blame when it comes to inadequate pensions retirement sums.
Research commissioned by Scottish Widows, questioning 4236 UK adults, finds the propensity to save is NOT linked to an individual’s salary or earnings as one-third of those people not saving earn in excess of £30k annually.
The pensions provider finds only half (55%) of Brits are saving enough to provide adequate retirement funds, dropping to 30% after deducting those people attached to final salary pension schemes.
Moreover, those workers not attached to such schemes and aged over 30, are only putting 9.3% of their income towards their retirement annually, with Scottish Widows estimating a minimum of 12% is required to ensure a decent standard of living during retirement.
Scottish Widows also finds there is a ‘hardcore’ group of habitual non-savers - 17% which nationally equates to around five million people - with one in six saving nothing at all and three-quarters (77%) of these individuals saving nothing for the last seven years.
Head of pensions market development at Scottish Widows Ian Naismith, says trust in the pension system is no longer the main issue.
He says other factors to take into consideration when saving for retirement include not only income, age and levels of understanding but also an individual's psychology.
He says: “Our saving patterns are strongly influenced by our general attitudes to life. While a low income may stop us saving, our findings show that a high income does not necessarily mean we will save. Attitudes to retirement age are also shifting, with many non-savers now resigned to working beyond 65.”
Scottish Widows also finds 33% of non-savers are prepared to work up to the age of 70, while 41% of people younger than 30 are willing to work beyond 65. In reality, six in ten non-savers still intend to retire at, or after, age 65, in competition with only 33% of those ‘saving adequately’ who intend to retire earlier.
Naismith urges the government and the pensions industry to improve attempts to revive voluntary approaches to long-term saving, warning: “What may be a more difficult goal will be understanding the psychology of habitual non-savers and identifying the triggers that may be required to change this situation.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Gareth Vorster on 020 7968 4554 or email [email protected].IFAonline
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