Survey Finds Britons Facing Risk in Retirement by Not Saving Enough

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23rd May 2012 16:27 - Financial Services

A survey of 5,200 UK adults commissioned by financial service provider Scottish Widows has discovered that Britons are saving for their Golden Years less than ever before.

The eighth edition of Scottish Widows’ annual pensions report has noted an “alarming” drop in the number of adults saving enough in preparation for retirement, with a fifth of respondents at 22% who have not yet saved a penny for their pension.

In addition, only 46% of respondents said they were saving enough to provide an adequate income of £24,500 during their retirement. This represented a 5% drop from last year, and an 8% decrease compared to 2009.

The market research also saw a contrasting expectation amongst surveyants about the amount of money they expect to have for  a comfortable retirement – the annual income aspiration at the age of 70 has risen from £24,300 in 2011 to £24,500 in 2012.

Scottish Widows has said that to meet these expectations, an average saver would need to save an additional £4,500 a year or £375 a month. Currently, based on this year’s lower savings levels, the total pension amount that people would end up receiving annually stands at only approximately £13,000.

Head of Pensions Market Development for Scottish Widows, Ian Naismith, commented: “With an aging population and ongoing economic difficulties, it has never been clearer that we need to do more to shift people quickly from their unrealistic ‘rose-tinted’ expectations of retirement.”

He added that auto-enrolment into a pension plan backed by the Government would be an ideal way to reverse the current trend of Britons choosing to spend their money on current expenses instead of tucking some away.

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