A new report has shown that pension savings in the UK have hit their lowest level for eight years.
The data produced by pension provider Scottish Widows, shows that only 46% of people are saving sufficiently for their retirement. This figure is down by 5% from the same time last year and by 8% since 2009.
The Scottish Widows figures come on the back of a similar survey last week produced by LV=, which showed that over 6.25 million people, currently aged over 50, will retire with the State Pension as their only form of income. You can read this story by clicking here.
Scottish Widows surveyed 5,200 people and the number of people making provision for their retirement has fallen to the lowest level for eight years. They survey also highlighted a worrying increase in the number of people saving nothing for their retirement, with 22% of people aged between 30 and the State Pension age making no provision whatsoever.
Despite a decrease in the number of people saving for their retirement, the amount of income people aspire to have when they finish work actually rose by £200 to £24,300 per year, however, the average provision was £150,000, which would produce a significantly lower income.
Ian Naismith, Head of Pensions Market Development for Scottish Widows, said: “With an ageing 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. They must either increase their savings substantially or change their expectations of when they might retire and how much income they will receive.”
Reasons for not saving into a pension
Amongst those not making provision for their retirement 73% of people said they had other financial priorities, whilst 40% put their lack of provision down to the cost of day to day living and 30% preferred to repay debt.
Retirement experts are also concerned that the volatile stockmarkets and the ongoing negative publicity surrounding pensions are also putting people off making provision for their retirement.
Experts hope that when Auto Enrolment starts to be introduced later this year it kick starts many people into making more provision for their retirement. However, there is still a concern that many people will simply just opt out of the scheme leaving them with nothing but the State Pension when they retire.