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A fifth of workers failing to save for retirement

A fifth of people are failing to make any provision at all for their retirement, a survey by Scottish Widows has found.

The report, which covered 5,200 UK adults, also found that 49 per cent of adults are failing to do so adequately save for retirement despite three quarters stating that they understand the need to take personal responsibility for their future.

The Scottish Widows pension index, which looks at those between 30 years old and state pension age and earn more than £10,000 a year, says that while 51 per cent are making enough provision for retirement, that figure slumps to 25 per cent when those with a final salary pension are excluded.

The report also found that people want an average of £24,300 a year in retirement to live comfortably, a drop from the £27,900 target before the recession in 2009.

Respondents claim they can now set aside an additional £97.10 a month on average for the long-term in 2011.

Scottish Widows head of pension market development Ian Naismith says: “”Put simply, people need to save an extra £58 per month on average to prepare adequately for retirement and make up the shortfall we are seeing currently. That is roughly the cost of a cup of coffee every day.  Even though for many this is realistic, and is in under the average £97.10 per month people say they can afford, we appreciate the difficulty in setting aside extra money.

“It’s about breaking through that inertia. And for some the amount that needs to be saved will be higher but it’s about taking small steps, getting on to the savings ladder and, more importantly, staying on it. Much higher saving levels are needed to get towards the average £24,300 a year people aspire to.  The message is that everyone should be putting aside as much as they can afford for their retirement.” 

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. a fifth, rubbish! The figure is far higher. Just done a mental list of friends and I’d say about 75% of them don’t save for a pension!

  2. Oh dear! How I would love to save for my retirement, but on a salary below £10,000, with a home and transport to run, unfortunatly there really isn’t anything left for long term savings. I am sure that I am not the only person with this problem…….the cost of living is running away with itself, but salary increments are not happening in the real world!! It’s not inertia, it’s affordability that is the problem.

  3. we are too broke paying for gold plated public service pensions to save anything towards our own retirement.

  4. With a vastly confusing set of pension rules and regulations, high profile financial pensions company failures and worries about job security. Are you surprised ?

  5. Re Comment 2. What is a salary increment ? The last time I had one of these that wasn’t linked to the achievement of some stupid and pointless target or another was 11 years ago !!!!! I have not kep pace with inflation and am actualy just losing money in real terms. The target culture has betrayed workers in financial services and let to some very dangerous sales and employment practices. I now will not work for any employer that doesn’t advertise a good basic salary or advertises OTE earnings. More should do the same !!!

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