1 In 5 Not Saving Any Money For Retirement

Despite a constant barrage of advice from the government and pension providers, close to a fifth of people are failing to save any money towards funding their retirement.

Instead of saving from as young an age as possible, retirement savers believe they can afford to put off starting a pension until they are 29 years old.

Meanwhile, the favourite age to retire remains 62 years old.

The average retirement income desired to fund a comfortable retirement has increased from £23,254 last year to £23,990, according to the 12th annual retirement report from pension firm Scottish Widows.

The research also showed that 40 somethings are saving less, mainly due to the pressure from helping older parents and children with their finances.

Disappointment as savings plateau off

A fifth of unemployed 40 somethings said they were caring for an elderly relative, while 37% were looking after children.

The survey revealed only 56% of people of working age are saving ‘adequately’ – which is setting aside at least 12% of their monthly income.

Overall, 58% of working adults believe they cannot save any more in the next year than they are saving now.

Robert Cochran, Retirement Expert at Scottish Widows, said: “With three solid years of improvement behind us, it is disappointing to see that savings levels are starting to plateau. Particularly worrying is the fact that savings levels among those in their 40s drop off at a time in life when retirement may be within 20 years.

More support for self-employed

“The light at the end of the tunnel in this picture is the long-term impact of auto-enrolment, which is clear to see from our twelve years of research. Auto-enrolment has already brought six million new workplace savers into pensions and with the minimum contributions for employers and employees set to rise in coming years, we expect average levels of savings continue will rise.

“Critical to maintaining this trend will be encouraging people to save more than the minimum contribution, as well as providing the right support to those who are not covered by auto-enrolment.”

Cochran also explained the firm is urging better support to help the self-employed make regular pension savings.

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