The UK is suffering from a massive pension gap totalling almost £320 billion marking the largest retirement package shortfall in the whole of Europe.
A study carried out by Aviva insurers and Deloitte accountants estimated that workers over the age of 50 need to up their savings by £6,200 a year to afford a comfortable retirement in later life. Workers in their 40s need to bolster their annual savings by £3,100 and people in their 20s need to save an additional £1,300.
The concerning figures illustrate the underlying problems with the current state pension and private pension schemes paid into by many Britons.
Dr Ros Altmann, of the London School of Economics, said: “The UK has the meanest state pension in the Western world. Private pensions have been hammered by falling markets, generous company pension schemes have been cut back and people are living longer. Unless there is radical change a larger proportion of people will be retiring in poverty”.
Chief executive of UK Life at Aviva Toby Strauss said: “We know from our research that many people in the UK are planning to work later into life, but this will not solve the issue fully. However, the problem is not without solution. By investing from an early age, even a small amount can make a big difference in closing the gap”.
