Shocking figures have revealed that 12% of British workers aged over 55 have not saved a penny for their retirement, says the government’s Money Advice Service (MAS).
Around 8% revealed that they believed they may never have enough money saved to retire. The figures underline a serious apathy towards pension saving in the UK – a condition dubbed by MAS as ‘pensionitis’.
Jackie Spencer, a MAS retirement and pension expert, said: “It’s of real concern that more than one in 10 over 50s approaching retired have not given any thought to how they will fund their retirement. It’s worrying that so many people are succumbing to pensionitis.”
“Planning to fund retirement is important and can’t be ignored because retirement is inevitable.”
Never too late to save
The MAS figures also reveal that four out of 10 people aged over 55 are resigned that they will work for as long as they possibly can.
One of the reasons given by the 15 million workers who are not making retirement saving plans is that they do not understand pension planning jargon.
Nearly twice as many admit pensions are confusing.
“It’s never too early for people to begin saving for retirement, and now employees are being automatically enrolled at work place pensions it should provide a solution for many,” said Spencer.
“For anyone who thinks they’ve left it too late, or for those beginning their working life, the Money Advice Service can always help with a range of free tools and tips.”
The MAS survey reveals large regional discrepancies attitudes towards pension saving. More than a third of Scots (35%) admit to not knowing how they will fund their retirement.
Retirement savers in the South East (30%) and London (27%) rank second and third behind Scotland as the worst pension planners, while Wales has the lowest number of workers with pension concerns (16%).
Few savers appear to appreciate the tax benefits of contributing to a pension, while around 55% of those still working confessed to not knowing how their money is invested. The proportion of people who couldn’t put a figure on how much they contribute each month towards a pension was 33%.
The jargon being used also confuses people with 36% saying they did not understand what an annuity is and 59% did not realise the size of their pension fund related to how much they were paid in retirement.
An annuity is an investment that pays an income in retirement that is bought with a retirement saver’s pension fund. The more money a saver invests in an annuity typically means a larger retirement income.