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Four in ten adults unprepared for retirement

Four in ten adults unprepared for retirement

Category: Pensions

Updated: 27/11/2009
First Published: 30/11/2009

MONEYFACTS ARCHIVE
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Pension inertia from the UK public is likely to cause a retirement crisis in the coming years, with almost four in ten people admitting to making no financial plans for life after work.

Worryingly, of those who said they had yet to make any savings for retirement, over a quarter (28 per cent) professed to having no intention of building up any fund whatsoever, a survey by Home & Capital Advisers' has found.

Those who do plan to make some savings at some point are likely to do so far too late, with the average age at which respondents said they would begin building up a retirement fund being 39.

It will come as little surprise that workers in younger age groups are least likely to have made preparations for retirement, with well over half (54 per cent) of under thirties saying they have done nothing or plan to rely on their partners.

Even in the forties age group, a sizable minority (35 per cent) have not started saving for their retirement.

"We're heading for an age crisis of monumental proportions – at both government and personal levels. It's most worrying that over a third of people in their forties have still not started preparing financially for retirement, and indeed that 28% of respondents do not intend to do so at all," Nigel Hare-Scott, managing director of Home & Capital Advisers.

"There persists a misguided view that 'government will provide'. But this ignores some basic facts. In under a quarter of a century, a sharp increase in Britons reaching retirement age - combined with rising life expectancy - will see the current system overwhelmed and unable to cope."

Of the respondents that had started to make provisions for retirement, 27 per cent said they paid into a employer's pension scheme, while a further 14 per cent preferred to pay into a personal pension plan.

Despite this, one in six people expected to have to live on less than £5,000 a year in retirement, and over a quarter (28 per cent) expected to stay in employment beyond the age of 65 to make ends meet.



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