40% of consumers turn their back on retirement saving

AXA's latest Big Money Index reveals a bleak long-term picture for increasing numbers of recession-weary consumers, with four in 10 now not saving for retirement and 20 per cent not saving at all.

AXA's bi-annual report, which presents a snapshot of financial confidence, behaviour and attitudes as well as views on topical issues among eight distinct demographic groups, revealed that the number of consumers unable to save for their future had risen by 6% since December 2011.

The continuing decline in pension ownership - company pensions and personal pensions fell by 2%, SIPPs and pension annuities fell by 1% - suggests that consumers are either relying on selling existing assets or are adopting a ‘head in the sand' approach when it comes to their future income. Almost one in five (19%), say they are relying on downsizing their home to give them retirement income, while one in five (20%) have stopped putting money into savings at all, a 3% rise since December 2011.

The picture is bleaker for those groups with no financial buffer: around six in 10 (59%) among ‘the stretched' are not contributing to a pension, and 27% have stopped putting money into savings in general; simply trying to survive the present instead.

Even the wealthier segments are struggling to save, with seven in 10 (68%) not making any contributions to investments in Q2 of 2012 and a third saying they were less inclined to lock money away as ‘nothing seems safe anymore'.

Andy Zanelli, head of retirement planning, AXA Wealth, said: "It is alarming to see how many consumers are failing to invest in their future in favour of surviving the present, with fewer people than ever now contributing to a pension. Figures from the Office of National Statistics earlier this year showed that contributions into pensions during the 2010-2011 tax year were slightly down on figures from the previous year and for the first time in a decade more people paid into an ISA than a pension.

"The current attitude to saving is unsustainable if we are serious about protecting our ageing population in years to come. Rising longevity means that, for many, retirement is likely to be longer than ever before, so planning ahead and taking control of their financial future as early as possible is vital if consumers want to be able to meet their ambitions in later life."