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HSBC: UK worst in the world at saving for retirement


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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There are 16 comments at the moment, we would love to hear your opinion too.

  1. 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.

  2. 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!

  3. 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.

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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

  10. 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?

  11. Nicholas Pleasure 20th February 2013 at 1:55 pm

    @ James Hurdman

    It’s probably a mixture of excessively high housing costs and comparatively low incomes. People of average incomes (£26K I believe) struggle to live with any real quality of life in most of the UK.

    On the other hand, unless you are a company director I would generally avoid pensions until ISA allowances etc have all been used. The slghtly better tax regime is offset by dozens of silly rules and restrictions coupled to a government that cannot help but meddle.

  12. Good comments, especially from Soren Loresen and Harry Katz.

    Not being a pensions specialist (who is, given the obsecenely frequent changes) I prefer to go under-the-skin and think about the root cause(s).

    Seems to me that the fundamental problem is dishonest Government/politicians.

    Yes, we know that compared to much of the world, ‘our’ Government/politicians are paragons of virtue.

    However, for example (as HK pointed out), they have led people to believe that National Insurance is some sort of insurance, when it is nothing of the sort.

    This is horribly dishonest and leads to the fools paradise/illusion of a ‘comfortable retirement’.

    Government needs to completely honest, however hard that is in practise.

  13. @ Harry Katz 20/02… clearly you have not read the HSBC report. This article merely majors on one headline. Please do yourself a favour and either read it online or download a copy at

    Belly aching about what politicians have/have not done is also facile… fact is advisers need to convince people they need to save and if people aren’t saving enough what does that say their confidence in advisers.

  14. Why save when overborrowers get bailed out via QE and savings/pensions get destroyed?

    It’s far too risky to save when UK governments can quickly destroy a lifetimes savings. It’s best to borrow as much as you can. The UK has shown now that it is willing to use QE, so that’s it as far as savings go for myself and my children from now on.

  15. @Anon 6.23 21 Feb

    Another clever clogs who can only state his views anonymously – obviously not confident enough to stand by his points.

    Clearly of course you are wrong – I did read the report (admittedly scanned).

    I found certain statements actually reinforced my own assertions. I can certainly agree that ‘retirement means that global ageing ranks as one of the major challenges facing the world in 21 Century’

    However I merely comment as an observer. The great majority of my clients don’t have these problems and anyway I don’t consider it my job to force feed anyone. As I so often remark I’m not a social worker. If a client brings up the topic I will gladly advise and I will also point it out as a duty of care when drafting planning reports, but I certainly am not in the persuasion industry. I am fortunate in that all my clients are sentient adults with a brain.

    There are elements in the report that are of absolutely no interest or relevance to me or my clients. What interest is the state of pensions in the UAE, Egypt or India? Why no mention of (say) Italy, Norway, Austria – indeed the EU as a whole? The facile element of the research is encapsulated in one particular sentence – ‘The Non-saver is more common amongst low income groups’ Gerraway! Who would have thought!
    I think you need to bear in mind that the report was written by an international bank with an axe to grind. They want to make money out of this.

    What the report does highlight is again what I have so often remarked upon – it is the prudent that in general fund the feckless. ‘43% of respondents said they would be more likely to prioritise saving for a holiday over saving for retirement’. The theme of the aspiration for frequent holidays cropped up regularly. I’m certainly not against holidays – if you can afford them. But invariably holidays mean expenditure and less (or no work) both inimical to pension saving.

    As far as our own government is concerned it is indicative that ‘getting into debt was a particular problem for people in Canada, the US and the UK.’ I can’t speak for the other jurisdictions but in our case our Government relies on people spending to shore up our dodgy economy. If retail sales fall there is woe and despondency. Debt is actively encouraged.

    Furthermore the report pointed out that ‘House buying is the major impediment to pension accumulation’. We are encouraged by our Government and financial institutions to buy property. If this isn’t buoyant all our woes are ascribed to this.

    Finally it was very interesting to have it confirmed that ‘Australia still has the second highest number
    of people in our survey (33%) who save nothing in spite of mandatory Superannuation since 1992’ So wither auto enrolment? And does this not point to what many have been saying – a basic living pension is the duty of an elightened State to provide.

    In conclusion I stand by every word in my post. Bellyaching about our inept politicians is entirely justified (just look at Clegg’s stupendously stupid utterances over the last few days).

  16. 25 years ago I joined the financial services and sold personal pensions, maximum investments plans along with general advice regarding having 3 month pay on deposit along with income protection plans and helped clients generate wealth. Now I advise on Income protection and loans!
    There is no longer the nice man from the Pru, Pearl, coop, NU, etc etc because they have been regarded out of existence to be replaced by the Free MAS.
    Look at the growth areas Wonga & pay day loans at thousands of % ape.
    With little, Bank, Tied, Restricted and IFA advive now available to the lower/middle income brackets the savings and pensions of the collective UK will only decrease.

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