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Workers planning to save more – are you?

Workers planning to save more – are you?

Category: Pensions

Updated: 29/05/2014
First Published: 28/05/2014

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Saving for retirement should be a top priority for workers of all ages, and it looks like the recent Budget announcement has highlighted its importance.

In fact, research from Legal & General has revealed that almost a quarter of adults intend to save more into their pension as a direct result of the changes, with the Budget seeming to do a great job of encouraging more people to get into the savings habit.

The figures show that 24% of those already enrolled in a scheme intend to contribute more to it, largely thanks to the increased flexibility and the fact there's no longer a requirement to buy an annuity. Interestingly, the changes have had an even more positive impact on younger savers, with 48% of 18-24 year olds surveyed actively planning to save more.

This is closely followed by those aged 25-34 with 43% intending to save more, however the figure is markedly lower among older age groups, perhaps because those getting closer to retirement don't think additional contributions will make too much of a difference.

Meanwhile, of those who have yet to save into a pension, 30% are considering doing so since auto-enrolment started to be phased in, and this time it's both younger and older age groups who are feeling keen.

Helen Buchanan, of Legal & General, commented on the findings: "The positive response among young pension savers to the pension flexibility introduced in the budget is a fantastic result. The chancellor appears to have achieved the impossible and created a pension system that appeals to those under 35 who, until now, were the age group who tended to put off saving for their retirement.

"For the Department for Work and Pension's automatic enrolment process there is also good news. The prime target for the campaign, the under 45s, appear to be 'nudging' towards saving in a pension. And it's encouraging to see indications that pension saving is now higher on the agenda for those aged 55 - 64 too."

So, will you be saving more into a pension? It's never too early to start, and the more you save the higher your retirement income will be – and the closer you'll be to achieving the standard of living you were hoping for.

Thanks to automatic enrolment it's never been easier to save towards a pension, and if you opt out you're not only missing out on tax breaks you're missing out on extra cash from your employer too – they're required to make contributions to your pension, as are you, and it can soon add up.

You don't need to stick to the minimum contribution level either. The minimum level is just that – the minimum – and there's nothing to stop you from saving more should you wish.

You might want to consider supplementing your pension savings with an ISA, helping you maximise your tax-efficiency and boost your retirement income even further. Why not start considering the options?

What next?

Find out more about auto-enrolment

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