Brits risk financial future as they fail to save for retirement
UK savers are failing to put enough money away to fund retirement, despite growing calls from industry figures for people to get to grips with their pension savings.
According to the latest report from Lloyds subsidiary Scottish Widows, nearly a quarter of working age people aren’t currently saving for retirement.
Meanwhile, over a third are not on track to save enough to fund their retirement, leaving them at risk of running out of money only a few years after leaving employment.
The Pensions and Lifetime Savings Association estimates that a retiree needs a pension pot of £605,000 for a moderate retirement lifestyle and £838,000 for a comfortable retirement.
Pete Glancy, head of pensions policy at Scottish Widows, said: “Our research paints a stark picture of how unprepared people in the UK are for retirement, with many admitting to not doing enough to support themselves later in life.”
“This puts them at risk of being one of the 15.3m people facing poverty in retirement.”
Lack of financial knowledge
A growing financial knowledge gap is also preventing savers from adding to their pensions, with many Brits failing to access financial advice.
Nearly 30 per cent of respondents said they were not confident in managing their savings for retirement due to being unsure of how pensions work and how to access one.
Analysts and advisers have increasingly encouraged people to reach out for advice, but savers have turned their back on traditional methods, calling them overly complex and expensive, leading them to use unregulated sources.
Consider other options
Nearly 20 per cent of respondents said they were unsure of how they will fund retirement, with relying on pension funds alone becoming increasingly unlikely.
Yet other traditional options for building wealth are moving further out of people’s reach, such as getting on the property ladder, due to ever increasing costs and struggling economic conditions.
Similarly, paying for short term needs, such as rent and bills, have also forced people to treat pensions as less of a priority, ultimately weakening their pot.
However, industry figures are urging people to consider other investment options to help fund their retirement.
Glancy said: “Retirement planning is much more than simply putting money away for the future.”
“Tracing old pensions, setting up additional investments to support retirement funds, and thinking about how and where you want to spend your twilight years cannot be overlooked.”