Research from Age UK has revealed the worrying trend of over-50s shunning retirement saving, despite the prospect of many being left with a meagre pension income in just a few years' time.
According to the figures, a quarter of workers aged 50-64 think there's "no point" in trying to save for retirement, while 12% think they've left it too late and a further 15% say they can't actually afford to save for a pension. The figures are even more worrying when adding in that half of those surveyed don't think that the state pension is enough to live on – which could lead to a massive income shortfall in retirement.
Arguably this disillusionment is a result of the recession, plunging annuity rates and the acceptance that many will have to work long into their retirement, but that shouldn't mean those approaching their golden years need to turn their back on saving. Although a lot plan on using their properties and current savings to see them through retirement that may not be enough, particularly given that the average pension pot is currently a mere £25,000 – enough for an annuity of just £1,500 per year.
"It's not surprising that tomorrow's pensioners have become disillusioned about saving for retirement," said Tom Wright, of Age UK, "[but] many people aged 50 to 64 won't have built up enough savings for retirement which could last for decades. That's why it's critical we come up with new ways to encourage and enable this generation to save and allow them to live the retirement to which they aspire."
Whilst automatic enrollment is a great starting point, it's clear that more needs to be done to encourage retirement saving and get future retirees interested in creating a nest egg.
Making voluntary contributions in excess of the minimum amount required by an auto-enrollment scheme would be ideal, but regularly saving into a separate account in addition to a pension should be a habit everyone gets into as well. As Moneyfacts recently reported, even saving little and often can make a huge difference - and it's never too late to start saving.
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