Having suffered through multiple recessions, a global financial crisis, and seen annuity rates plunge to record lows, disillusioned workers may be turning their backs on pensions as they approach retirement.
A worrying new Age UK poll found that even though they face a retirement on meagre incomes, a quarter of people aged 50 to 64 think there is ‘no point’ in trying to save for retirement.
Others are also in trouble, with 15 per cent saying they can’t afford to save for retirement, and 12 per cent thinking they’ve left it too late to save.
Tom Wright, of Age UK, said: ‘It’s not surprising that tomorrow’s pensioners have become disillusioned about saving for retirement.
‘While we welcome the introduction of automatic enrolment into workplace pensions, 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.’
Quite why 50 to 64-year-olds think there is no point in saving for retirement is unclear, and is particularly perplexing given that half of them don’t think the state pension will be enough to live on when they come to retire.
They may well be coming to terms with the possibility they will have to work for longer to sustain their lifestyle as the years advance, particularly given the state pension age is due to rise to 66 in 2020 and 67 in 2028.
Some will be relying on their properties and savings to see them through their later years, but while it is important to have this kind of backing in retirement, they won’t provide the guaranteed income of a pension.
With average pension pots at retirement only £25,000 – enough for annuity income of around £1,500 per year – it’s clear that the current crop of pensioners aren’t saving huge amounts into Personal Pension Schemes.
Anyone who turns their back on retirement saving could find themselves with an even more measly income than this.
Suspicion of pension saving is particularly prevalent in the North of England, with 34 per cent of those over 50 saying they didn’t see the point in saving, compared to 23 per cent in the South and the Midlands.
If you want to know what income you could be looking forward to in retirement ask us to carry out a retirement planning review for you.