More people saving for retirement

The overall index score from the Standard Life Savings & Investment Index has increased from 11 points when the Index started in July 2005 to 23 in October 2006.

Despite this positive trend only 58% of the UK population are saving on a regular basis, a 5.5% increase from July 2006.

For the first time since the Index began retirement has taken over from holidays to claim the top spot for what respondents are saving for. Just under half of those saving stated that they are saving for retirement, an increase of 6% from July, with a corresponding decrease of 6% of respondents saving for holidays. As would be expected at this time of year those saving for Christmas has significantly increased from 20% in July to 29% in October.

Trevor Matthews, Chief Executive, Standard Life Assurance Limited, “It is encouraging that more people are saving and, of those who are saving, more are saving for their retirement. Although it is worrying that only 33% of those questioned are satisfied with the level of their retirement planning.”

This could be explained by the fall in popularity of specific investment vehicles. Personal pensions have fallen in popularity by 18% from a high of 27 points in July to 22 points in October although employer/occupational pension schemes are viewed as slightly more attractive than they were during the summer. The popularity of Self Invested Personal Pensions (SIPPs) has dropped by 21% to 15 points as we move away from the main selling season. Individual Savings Accounts (ISAs) continue to score the highest at 51 points, a drop of 5.5% from July.

Mr Matthews continued “The UK has the highest level of personal debt in Europe and for this to change we must make it as easy to save as it is to borrow. 37% of respondents in our research expected to save more in the year ahead but without a change in cultural attitudes to savings this may be optimistic. For attitudes to change it is important that savings are seen as the new “must have” like a gym membership or an ipod.”

As in previous waves, people’s own homes and buy-to-let property are the most popular investment vehicles although buy-to-let has seen a 4.65% drop in attractiveness. Equities have seen an increase in popularity to 12 points from a low in July of 2 points but have yet to regain their high of January 2006.