According to a report by Scottish Widows, the number of people saving for pensions is at the lowest ever on record, with almost half the population not saving enough and one in five adults saving nothing at all.
The ninth annual Scottish Widows Pension report surveyed 5,200 adults across the UK and has revealed that potentially millions of people will be unprepared for their retirement.
The report cites a weak economy and later home buying as part of the problem. Ian Naismith, Pensions Expert at Scottish Widows, said: ‘We are being hit with a triple-whammy. The continued economic uncertainty is making it difficult to save for the long-term. The age of first-time buyers is rising as we face troubles getting on the property ladder, and we have an ageing population. These factors combined create a perfect storm for those heading towards retirement.
‘People are now less prepared for retirement than at the height of the downturn a few years ago, yet expectations for income in retirement are still increasing. To meet these aspirations, an average saver would need to save £12,000 a year, or £1,000 a month.’
Scottish Widows’ solution is threefold: people can start saving at a younger age, save more, or retire later. The pensions industry is vital to people’s security and welfare and must constantly adapt to economic change. Find out more about the challenges of working in pensions.