Britons are facing a £3,200 shortfall in their pensions but a quarter of people are failing to save for their retirement.
On average people in their 50s think they will need £20,100 in retirement to get by. However, they know they will only have £16,900.
Two-thirds of those heading into retirement say they are concerned about their financial security – with the greatest concern being rocketing prices, according to new research by insurance group LV=.
Some 77 per cent said the rising cost of living is their biggest concern.
Brits in their 50s are increasingly concerned about being stung by the rising cost of living when entering retirement.
On average people think they will need £20,100 to get by each year – but their greatest fear is that rising energy bills will take a massive bite out of their pensions.
Some 42 per cent fear a recession will leave them in penury in retirement, while 35 per cent were worried about rising interest and 32 per cent are concerned about the credit crunch.
For a fifth of people, their own adult children draining their finances added fear to how they would make ends meet in retirement.
But these fears are not making people save.
A quarter of people are not saving for their retirement, and 46 per cent have not upped their savings.
Mike Rogers, group Chief Executive of LV= said: “The combined impact of the rising cost of living, fears of a recession, and widespread media coverage of the credit crunch, has created an anxious majority of people facing retirement who are very concerned about their financial future.
“Despite the well-publicised £27 billion savings gap, it is worrying that as many as a quarter of the people we surveyed are making no provision whatsoever towards their retirement.”
Despite the rising financial fear, 56 per cent say they have not yet taken any form of financial advice about retirement planning.
Mr Rodgers added: “Given that so many people are aware they will face financial difficulties in retirement, and that pensions products aren’t simple, it is staggering that so few are seeking financial advice.
“This is obviously not helped by the survey’s findings, that many people are confused by what they perceive to be ever changing tax rules.
“Our advice to anyone approaching retirement is to seek professional financial advice to ensure you make the most of your finances when you retire. And young people shouldn’t ignore their own retirement needs, despite it being decades away. Saving just a little and often – as much as you can afford – is a step in the right direction.”
2 Comments
This article really hits the nail on the head. One problem us 50’s have is that we were the 30’s paying 16% for our mortgages in the last recession. Of course we didn’t save!
The other problem is who to trust for financial advice when there are so many sharks out there.
Liz, I think you will find that it was 15% for a very short time which, based on low house prices (my own house was bought for £35,000 then) was not the crippling ratio that it is now. House prices now, with relatively much lower interest rates, when taken into account with wages etc are far, far worse than they were when rates stood at 15%.
I accept that then it was difficult to save, what I don’t accept is that it has been impossible to save since then. It happened many years ago and pension funds could have acrued sizeably in that time given the will and ability to save. My sympathies are with those who saved and contributed to their pensions in good faith expecting a reasonable return on their retirement. Gordon Brown and New Labour then decided to raid pension funds initially for £5 billion with recurring relative amounts every year ever since. Those people have seen their pensions disapear altogether or have had them severely reduced. You cannot trust this Government, they will screw anyone for tax and pension funds are ripe for the picking.