is the uk ready for retirement?
“Defaqto’s pensions expert Matt Ward
highlights some interesting facts from his latest report into the
retirement market:
Are more people saving for their
retirement?
Our results indicate that more people do
appear to be saving for their retirement. However, this still only
amounts to 1 in 4 people, so it is important that more people
realise the importance of saving for their long term future.
Why are people not saving for
their retirement?
Looking at those people who weren’t currently
saving for their retirement, the main reason why not is primarily
due to a perceived lack of spare income (nearly half of those not
saving for their retirement felt they didn’t have enough spare
money). Perhaps understandably younger people tend to feel
retirement is too far away and not something to worry about yet,
but around 1 in 6 people also just ‘haven’t got round to it’. As it
has been reported that people aren’t saving enough for their
retirement people need to put planning for their retirement higher
up their list of financial priorities.
What will people rely on for
income in their retirement?
Consistent with last year’s findings around
two thirds of all people still expect to rely on the State Pension
for income in their retirement, with around half also expecting
something from their employer’s pension scheme. However, there has
been a slight drop in the number of people who are confident that
their retirement income will meet their needs.
Are people seeking advice for
their retirement? And who do they trust to give
it?
Perhaps a little worryingly, only 1 in 4
people have sought any advice on planning for their retirement and
that number drops even further amongst the under 35s. A higher
proportion of people primarily trust financial advisers for advice,
although around a fifth also trust their own judgement and / or
their friends and family. What is clear is that there needs to be
advances in pensions educational programmes and generic sources of
pensions advice. Given the lower likelihood for younger people to
have sought advice these will be vital methods for engaging the
next generation of pensions savers.
What do people really think of
Pension Plans?
Around a third of people recognise that
pension plans are important for when they retire, although 1 in 5
believe they are a necessary evil! Amongst the under 24s there is a
stronger view that pensions are ‘too confusing to worry about’ or
that they didn’t have a view at all, again demonstrating a level of
apathy that warrants the need for improving the available methods
of pensions advice.
If people aren’t saving enough for
their retirement, which political party do people trust to solve
this problem?
In short, mainly none of them! The latest
results show that two thirds of people don’t trust any of the
political parties to resolve the problem, up from just over half of
those interviewed in the 2007 survey.“