Almost half of UK workers stopped or reduced their retirement savings during the recession, which will have an impact “felt for many decades to come”, an HSBC report warns.
The pension trends survey of 2,000 of people reveals 31 per cent of UK workers stopped or reduced saving for retirement in cash deposit, 25 per cent in investments and 25 per cent in personal pension schemes.
In addition, 59 per cent say they will not have enough money to live on in retirement and one in ten do not think they will ever be able to retire completely. Retired people say at least £35,000 a year is needed to fund a comfortable retirement.
Two in five UK workers expect their standard of living to fall when they retire, compared to a worldwide average of just 23 per cent, the reports says.
Despite the auto-enrolment reforms, a significant amount of working age people are not confident workplace pensions will give them an adequate income.
Some 80 per cent of retired people think an employer pension scheme is a good way to provide a retirement income, compared to just 65 per cent of working age people. About 60 per cent of both groups are confident buy to let property will support their retirement, while less than a third of people think annuities will help generate retirement income.
Around half of retirees who did not save enough for retirement say they only realised this once they had retired. and it was too late to save any more.
HSBC head of UK wealth Caroline Connellan says: ”Our research shows that the financial hangover from the economic downturn is impacting what many are saving for retirement.
“Today’s workers have greater responsibility to think carefully about how much they’ll need for a comfortable retirement. This can sometimes involve quite complex decisions on the various savings and investment options and most people will benefit from financial advice.
“The Budget changes, which create greater freedom and choice on pensions from April 2015, have resulted in more interest from our customers to review their retirement plans. If there’s one action we should all consider, it’s to start saving as early as possible: even the smallest amounts saved now can make the likelihood of a comfortable retirement all the more real.”