Brits sleep walking into retirement

A new report by Defaqto highlights the complacency that many people have about how they are going to fund their retirement.

The Retirement Income and Savings Report is a comprehensive analysis of the entire personal pension market, looking at everything from the economic background to retirement, how pensions themselves are developing, the service that financial advisers get from pension providers as well as what provision ordinary people are making for their retirement.

One of the main findings of the research among the public showed that fewer people are saving for their retirement than they are for their next holiday, while over a third are not saving at all. Unsurprisingly, seven in ten people said they would be relying on their state pension.

The research also turned up the fact that people wanted more guarantees about how much their savings would earn and also more incentives to save in the first place. There was quite a groundswell of support for some form of compulsion to save, with a third of people thinking that everyone should be made to contribute to a pension and half as many again thought employers should have to provide pensions for their employees.

Commenting on the findings, Matt Ward, Principal Consultant – Pensions and Wealth Management at Defaqto said: “Our research showed that many people are sleep-walking into retirement. While the majority are planning to retire from full time work at or around normal retirement age, many people realise that their income in retirement may meet their needs. For this reason, some 50% of those currently working expect to either continue doing some work in retirement or to defer their retirement to make their savings last as long as possible. Relying on part time work could be really dangerous, partly because the jobs might not be there when they are needed and partly because people may not be able or indeed, inclined, to work when it actually comes to it.”

“The message is clear. Start thinking now about your retirement and give yourself the greatest degree of comfort you can by making as much provision now as you can afford to.”