Even before the cost-of-living crisis, there was several reasons for this. Some people may simply be unaware of the need to save for retirement. Others may not have enough money left over after covering their basic living expenses to contribute to a pension plan.

More Comfortable

The most common reason, however, is people believe they will have plenty of time later in life to begin saving. However, this is not the case. It is never too early to begin saving for retirement, even if you are in your twenties or thirties. The earlier you begin, the more time your money has to grow. The findings also highlight the fact that one in every six people (16%) approaching retirement still has no private pension savings, thereby missing out on the opportunity to make their life after work more comfortable.[1]

Alarming Number

At least 17% of people aged 55 and over in the UK admit to having no pension savings (other than the State Pension), which is only slightly better than the national average of 21%, who have no private pensions. According to the findings of this study, an alarming number of people are effectively ‘sleepwalking’ towards retirement without adequate planning. However, there are signs that as people get older, they are becoming more aware that a lack of pension savings is a problem – albeit perhaps too slowly.

Pension Deficit

The problem is most visible among adults under 35. Almost one-quarter (24%) of this group
despite being the generation to benefit from auto-enrolment into workplace pensions, claim to have no pension savings at all After the age of 35, this drops to one in every five, and one in every six for those over the age of 55. People clearly begin to save more as retirement approaches, even if they have missed out on the opportunity to save for many years. Lack of pension savings is especially problematic for those who do not work full-time. Surprisingly, only 8% of full-time workers said they had nothing in their pension. Part-time workers, on the other hand, had one in every four (24%), indicating that they may face a pension deficit when they retire.

A pension is a long-term investment not normally accessible until age 55 (57 from april 2028 unless plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits. Tax treatment varies according to individual circumstances and is subject to change.

Please contact us for more information on how we can help protect your future financial well-being and the options available to you.

Source data: [1] Survey by Unbiased and Opinium of 2,000 non-retired UK adults, conducted June-July 2020.