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29% Expect to live on state pension

Standard Life’s latest savings and investment index shows that consumers are still alarmingly misguided when it comes to saving for their retirement.

Senior pensions policy manager Andrew Tully says people generally underestimate how long they will live by five years and do not realise how much pension is needed to fund their retirement income.

He says: “They need to think about this seriously if they do not want to be eating cat food in retirement.”

However, he predicts that people will start to save seriously when they see their parents struggling to live.

He says: “Trying to get people to understand the value of a pension is key.”

The latest survey found that 29 per cent of people questioned think they will be able to rely on the state pension in retirement.

The report also showed that while the majority of people still believe that a pension is a good way to save for retirement, the number of people who think this has declined from 68 to 64 per cent since the last survey in April. The number of people who are unsure about the suitability of a pension to save for retirement has increased from 14 to 17 per cent.

Spokesman for pensions and protection Paul Keeble says these statistics are not surprising in light of the current economic climate.

He says: “Investor confidence will be affected and people will wonder whether their money could be better invested elsewhere.”

In contrast, he says IFAs think about the long term and it may be a better thing to invest in a pension now as share prices are lower.

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