Retirement planning is lost on thousands of Britons.
A fifth of current workers will rely on state pension.
Half of British workers feel they will be worse off in retirement than their parents. However, many people are failing to counteract the growing problem, according to a new HSBC report.
The lender’s study called ‘The Future of Retirement: The power of planning’ found that Britons are aware that they have longer life expectancies than previous generations and that the state pension will not be able to cover their needs. Despite this they are not making the right plans to sufficiently fund their retirement.
Joanne Segars, chief executive of the National Association of Pension Funds, said: “Far too many people are trapped in the headlights when it comes to their own retirement. They know they’ll need money in their older age, but they’re doing nothing to prepare for it”.
The study found that 17% of the 1,000 participants questioned did not know what their main source of income will be when they retire. Just over a fifth said they will rely on a state pension.
Almost 70% of respondents said they are worried about coping financially and just under a half admitted that they are not saving enough for retirement. Only four in ten people were found to have put a financial plan in place with the other 60% still unprepared to deal with the problem.
Tom McPhail at Hargreaves Lansdown said: “The most significant step to resolve this problem will be the government’s auto-enrolment plan, which will mean that by 2016 the vast majority of employees will be members of a pension”.