Not many people are saving for retirement: Report

Not many people are saving for retirement: Report

	Published : Tue, 27 Jun 2006 12:35 By : David Simms Print this Story

LONDON - A new pensions report by Scottish Widows shows that the number of people who do not know where their main retirement income will come from is on the rise. This percentage has nearly doubled and includes almost a quarter of the population.

The report is based on a study of more than 5,000 Britons found that employees who are not a part of any pensions scheme are saving just 5.8 percent of their pay as compared to 7.9 percent last year. Women are the worst savers, the report said and added that one-third are failing to set aside any amount for their retired life. Scottish Widows said that the average investment amount had increased from £16,000 to £24,300 last year.

This indicates that people have more faith in property markets than in pensions. "The deterioration is very disappointing when you consider how high profile pensions have been in the last 12 months," said Ian Naismith, head of pensions market development at Scottish Widows. "In fact, our figures show that four in every five people who aren't relying on a final-salary pension are failing to save adequately for their retirement, and that two in five are saving nothing at all."

The report added that those who are saving substantially were more likely to be male, were employed at a big company and were high earners. As opposed to this a non-saver was most likely a female with a young child, who was either in debt or self-employed. "With this level of under-saving, no-one can be in any doubt about the challenge facing us all when it comes to preparing for retirement," Naismith said. The report also said that there was a big jump in the number of people who are not saving in any pension plan, this number rose from 17 percent in 2005 to an estimated 28 percent this year.

"It is essential that the decline in retirement savings is halted very soon. If people wait until the Government's reforms come into effect in 2012, it will be a case of too little too late," Naismith concluded.