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Savers feeling the crunch

Scottish Widows says a cloud of pessimism is hanging over savers after a survey found that many believe they cannot afford to increase the amount of money they put aside.

Almost 60 per cent of people questioned for Widows’ pension report said they will not save any extra money in the next 12 months. Forty-four per cent of those who do not already have a private pension believe they will never contribute to one.

Widows says only 51 per cent of people who could be preparing financially for retirement are saving adequately although this is up slightly from 49 per cent last year.

Head of pensions market development Ian Naismith says a distinct sense of pessimism emerges from the survey, with consumer confidence falling compared with last year.

He says: “A number of people are beginning to save more consistently within short-term savings vehicles such as Isas but many people just do not see how they can afford to put anything extra aside and this does not look to be improving over the coming months.”

Hargreaves Lansdown head of pension research Tom McPhail believes the situation will get worse before it gets better. He says: “There is rising pressure on household finances, a wage squeeze and rising inflation. Pensions are likely to be compromised.”

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