Pensioners of tomorrow give up on saving
Published on 30 November 2013 01:30 PM
Disillusioned pensioners of tomorrow give up on saving
A new Age UK poll[i] has revealed that just under a quarter of people aged 50 - 64 think there's no point in trying to save for their retirement.
The poll, carried out to mark the launch of the charity's Financial Services Commission, found that 23 % of this age group across the UK don't think it's worth saving for later life.
The survey found that, far from being complacent about their financial predicament, many people did not believe that they had enough to retire comfortably.
In fact 26 % of 50-64 year olds worried about having enough to live on. In addition 15% said they couldn't afford to save and 12% said they thought they'd left it too late.
Yet, virtually half, 47 %, of 50-64 year olds think the State Pension will not be enough to live on, raising the spectre of older people struggling to make ends meet later on in retirement.
Only 15 % of 50-64 year olds thought they had saved enough already.
The figures paint a profoundly worrying picture of the financial resilience of tomorrow's pensioners. Although many are secure, there is a substantial number within this age group who will have little financial resilience to fall back on in their later years when many will have stopped working but are likely to live on average for another 20 - 30 years.[ii]
For women aged over 50 the picture is particularly bleak with 30 % disillusioned about saving. That compares with 23% for men in the same age group.
The polling also revealed a North-South divide with 34 % people aged 50 plus saying there was no point saving compared with 23% in the South and the Midlands.
Tom Wright, Group Chief Executive of Age UK and Co-Chair of the Financial Services Commission, said: "It's not surprising Tomorrow's Pensioners have become disillusioned about saving for retirement. As a group, they have weathered multiple recessions, a global financial crisis and seen, interest and annuity rates plummet leaving pension pot returns at an all-time low.
"While we welcome the introduction of automatic enrolment into workplace pensions, many people aged 50-64 still won't have built up enough savings for their 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."
Age UK's Financial Services Commission is holding a series of summit meetings between December 2013 and June 2014 where the charity will be carrying out research, bringing together leading industry figures and consulting older people on ways to build up financial resilience. The purpose will be to enable them to prepare for later life and to ensure they can stay financially included until the end of their lives.
Dr Alexander Scott, Chief Executive of the Chartered Insurance Institute and Co-Chair of the Financial Services Commission, said: "I am delighted to be co-chairing this Commission with Age UK. These pressing issues facing people nearing retirement demand fresh and joined-up thinking.
"While some work is going on across the spectrum of stakeholders including the insurance and investment sectors; what is sorely needed is a forum that brings this thinking together at the highest level.
"So our challenge in this Commission is to develop a set of coordinated outcomes that have the public interest in their DNA, and are ultimately meaningful to consumers themselves."
The Commission comes in the wake of Lord Filkin's report earlier in the year which warned that Government and society are "woefully unprepared" for the UK's ageing population. It will report its findings in June 2014.
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- TNS Capi Survey for Age UK (November 2013), 960 adults aged 50+ across Great Britain
- Between 18-34 years