A recent report published by leading insurer Scottish Widows has found that 1 in 5 Britons are saving nothing at all for their retirement and over 1 in 3 are not saving enough to provide them with the income that they are expecting.
Although the amount that people are saving in their pensions has fallen over the last 3-4 years, peoples aspirations have actually increased with research confirming that the level of income that people would feel comfortable living on at age 70 is now £25,200 per annum. In 2012, this figure was £24,500.
At age 65, the total pot for an average saver could be around £122,000 in today’s terms, which might provide an annual pension of just £3,860. With the addition of the state pension, this would generate an annual income of approximately £11,400, falling drastically short of the £25,200 annual income people are looking for and equating to a total pension fund shortfall of circa £430,000.
From the research carried out it is clear that people need to try to save more for their retirement, even if the amounts are very small. Joining a workplace pension is the best place to start as many employers will also contribute into a individuals plan too.
The Scottish Widows UK Pension Report, which first launched in 2005, monitors pensions savings behaviour annually using the Scottish Widows Pensions Index and the Scottish Widows Average Savings Ratio. The research was carried out online by YouGov who interviewed a total of 5,216 UK adults over the age of 18 in February and March 2013.