More than 30 million Brits are not convinced that they are saving enough for their retirement, while a third (34 per cent) believe that they should be saving more.
According to a major new report from the Pensions and Lifetime Savings Association (PLSA), 80 per cent of pre-retirees said that they are “not confident” that they are saving enough for their retirement. This figure equates to 30.4 million people across the UK.
The report – titled ‘Hitting the Target: A Vision for Retirement Income Adequacy’ uncovered a series of financial concerns among the UK’s future retirees.
Just over half (51 per cent) of those surveyed wrongly stated that the Government’s minimum auto-enrolment pension contribution level was the ‘recommended amount’ to save, rather than the minimum amount.
Furthermore, four in ten (44 per cent) assumed that the auto-enrolment level was set to ensure that everyone will be comfortable in retirement, rather than simply ensuring that pensioners have a liveable income.
“Millions of savers are in the dark about whether they’re on track for the lifestyle they want in retirement,” said Nigel Peaple, director of policy and research at the PLSA.
“With future generations unlikely to have the same levels of property wealth, or final salary pensions, as current retirees do, it’s vital more is done to ensure people can cover the costs of later life. We want the government, pensions sector, and regulators to work together to take forward our recommendations and help many more people achieve the retirement they desire.”
The report highlighted the confusion which remains around the pension savings targets. This has prompted the PLSA to make a number of recommendations to the government regarding pension savings. These include:
- Introducing targets and increasing engagement
- Increasing pension savings
- Increasing support at retirement
- Making it easier to use other income sources, such as borrowing from a home.
- Improving how pension schemes are run.