Stagnant wages and rising living costs are stopping huge numbers of workers aged over 50 from saving enough money to retire.
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Retirement experts say 43% of those aged between 50 to 59 years old, and 38% aged between 60 to 69, say they are either “occasional” or “absent” savers, meaning that they only save infrequently or on an ad-hoc basis, with no clear savings goal.
Two thirds of workers in their fifties have not started saving more even though they are approaching retirement and half in their sixties are not saving enough, even though many have passed state retirement age, says a report from financial company Aviva.
Although older workers feel they lack the disposable income to save as much as they would wish for their retirement, the survey also revealed another reason for their lack of saving.
Don’t know how much to save
Millions claimed they did not know how much to save and were confused about if they were saving enough or not.
“They are not being informed by the reality of their situation, said Lindsey Rix, managing director for savings and retirement at Aviva.
“It is worrying to see so many of the UK’s older workers in the dark over how much they need to save to afford a comfortable retirement.
“For many older workers supporting family members including children and parents, saving for retirement can all too easily take a back seat in terms of financial priorities.”
Earnings lag inflation
The company worked out that around 42% of retirement savers over 50 had doubts about how much they should save to fund a comfortable retirement.
Official figures show inflation is running at 3.1%, which knocks back the value of savings, while millions of workers, especially those in the public sector, has seen no real terms rise in their incomes for five years or more.
Data from the government shows wages increased by 2.5% in the past year, which means earnings are still lagging rising prices. the age of 65.
To save enough money to fund a pension of £10,000 a year, a 50-year-old would need to set aside more than £940 a month, which would give a pot of around £200,000
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