Britons not saving for old age

Only half of Britons will have an adequate income during their retirement, according to a new report from Scottish Widows.

13:31 10 June 2005

Only half of Britons will have an adequate income during their retirement, according to a new report from Scottish Widows.

Just 55 per cent are currently saving at the levels needed, the study found, and this drops to 30 per cent when removing people that are members of final salary pension schemes.

Surprisingly, how much people save is not related to how much they earn, with one in three who do not pay into a pension earning more than 30,000 a year, the figures reveal.

"This report shows that our decision to save or not to save for retirement is highly complicated, perhaps more so than has been considered previously," said Ian Naismith, head of pensions market development at Scottish Widows.

"Factors to take into account include not only income, age and levels of understanding but also individual psychology. Our saving patterns are strongly influenced by our general attitudes to life."

People are saving 9.3 per cent of their income on average each year, but it is recommended they set aside at least 12 per cent.

Mr Naismith concluded that the government and the pensions industry must make "rapid progress" in getting people to voluntarily save for their old age.

"Within this must be a consideration of income, age, attitude to retirement age and non-pensions wealth," he added.

"What may be a more difficult goal will be understanding the psychology of habitual non-savers and identifying the triggers that may be required to change this situation."