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Categories:Pensions

HSBC: UK worst in the world at saving for retirement

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Money

The UK is the worst country in the world at saving for retirement, data from a new report into global savings shows.

In the HSBC report, “The Future of Retirement: A New Reality”, the average Briton is found to spend 19 years in retirement but with savings that will run out after just seven.

It means the average Briton’s savings only covers 37 per cent of their retirement income with the rest being covered by other income such as the state or employment.

In a study that spanned 15,000 people across 15 countries Britain had the lowest level of savings for retirement.

Malaysia was the best nation analysed with its citizens saving 71 per cent of their needed retirement income.

On average globally people are storing up enough to pay for 56 per cent of their retirement which is an average of 18 years, leaving an eight year shortfall.

In the report, HSBC group head of wealth management Simon Williams says: “There are, of course, many obstacles to saving, including the lack of a regular savings habit and the financial impact of unexpected life events.

“Unfortunately, the impact of saving too little or too late will only become clear in later years, when people find they are retiring without the necessary income to support an active and fulfilling retirement.”

HSBC pension saving table

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Readers' comments (16)

  • Not a competition that anyone should relish winning.

    Any politician who has contributed to this outcome should hang their head in shame (there are many. No doubted comforted by their own taxpayer underwritten retirement income.

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  • Horrible headline.
    I wonder how UK saving compares with the rest of Europe? This survey does not show that and therefore paints a bleaker picture than might otherwise be the case. Certainly 10 years ago UK pension funds were huge – according to Steve Bee at the time they were something like twice the size of the next two European countries pension funds put together! (or something like that!) The point being we had past generations that saved in spite of pension mis-selling scandals!
    I wonder what the case is now? I cannot see it being anywhere as good as it was but how does it compare with Europe? I can certainly think of many reasons why it should be much worse now but of course Nest will put things right!

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  • A good report from HSBC which should be a wake up call for the Government. You see what happens:
    - when you remove a number of the tax incentives and profit management arrangements for private companies to have final salary schemes
    - when you add extra liabilities to those final salary schemes.
    - when you keep changing the tax/benefits regime around personal pensions
    - when you have a means tested pension credit system that discourages saving (possibly finally being sorted).
    - when you keep threatening to remove certain tax benefits like 40% relief and the tax free lump sum.
    - when you take the profit out of distribution (stakeholder).
    - when you make savers pay an up front fee for regular advice.
    - when you make advisers who wish to spread their fees buy a pointless consumer credit licence for £2000.

    It shows that our pensions policy and financial regulation has been run by some remarkably stupid people.

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  • As to be expected – sloppy research, yet again.
    There are good reasons why people in the UK don’t save for their retirement:
    1. They have been brought up to believe that we live in a Welfare State.
    2. They have paid National Insurance all their working lives and fondly believe that this is what pays their pensions and healthcare and dishonest governments over the years have done nothing to tell them that actually this is just a tax and goes into the general pot to be wasted with all the rest.
    3. British Governments just cannot leave their fingers off our pensions and mess about with them every Thursday. So no one is actually sure what they are saving for.
    Put that into your research before coming out with facile results.

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  • Did they say that in the UK 20 per cent of your private Pension will be taken off every month untill your dead. Thats why the Government calls your Pension 'earned income' which it isn't really. Or that your State Pension which you paid for, for years, is Tax deducted as well,. Which by the way they call Benefits. Then they keep saying that the country, young taxpayers, cany afford to kee subsidising Pensioners. Any wonder people are backing of getting involved in private Pension Schemes.

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  • Not exactly a surprise in a land where house prices have been encouraged to climb to such a ridiculous level most capital and income are poured into the home. Not forgetting the impact of political and regulatory attacks and changes and our industries 'own goal' attacks which have destroyed value, faith and interest in pensions.

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  • It's interesting that after 20 years of compulsory pension savings (i.e. superannuation) Australia is still one of the poorer 'performers'.

    It takes a long time and needs meaningful contribution levels to address this probem.

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  • At the moment, people can barely pay their heating bills.
    How can they save for retirement?
    Some will ask themselves why should they? when government taxes everything to the hilt to pay for those who cannot be bothered to work at all?
    Worse still it pays out to people who have never paid a penny in tax or NI in the UK and simply come here because they have heard the benefit system will fund them.

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  • Yeah and I hope everyone is aware that current state pension and public sector pension liabilities accrued as of 2010 reperesent around 321% of GDP (source ONS) ? So the situation is actually a lot worse than HSBC state that it is. IDS at his flat rate state pension launch the other week should have got a Maxwell lookalike to launch it as truthfully you have as much a chance of getting a pension out of the state as you would with him

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  • I would hazard a guess that if you look at personal indebtedness figures then the results would look similar i.e. countries where the population have large debts are the worst at saving for retirement. Is the real issue a lack of tax incentives for pensions/saving for the future, or is it actually a culture of living beyond our means now?

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