Millions are going towards a disappointing retirement

Figures released today by the ONS suggest that 20 million working-age adults (aged 16 to 64) may be sleep-walking towards a disappointing retirement.

There are approximately 40 million working-age adults in the UK [2], and half (54%) state they are confident that they will enjoy the income in retirement to which they aspire. This is despite two-thirds (68%) having given no thought as to how many years of retirement they may need to fund, and less than half (42%) saying that they understand enough about pensions to make decisions about retirement.

The employer pension is consistently seen as the safest way to save for retirement. This attraction will have been boosted by automatic enrolment which has brought 8 million people into pensions since it was introduced in 2012 [3]. Evidence suggests that most new savers are saving at minimum levels - currently 1% of employee salary, matched by 1% from the employer. At minimum levels, few will enjoy the retirement income to which they aspire.

Commenting on today's report, Alistair McQueen, Head of Savings & Retirement at Aviva, said:

"Automatic enrolment is the savings vehicle that will carry most people towards their retirement. By staying in their auto enrolment scheme, ordinary working people are helping to build a more robust retirement. But even when minimum saving levels rise to 8% of salary in 2019, millions are unlikely to achieve the income in retirement that they would like."

"Aviva believes that the minimum levels should be raised towards 12.5% by 2028 to deliver against the expectations of many people."

Source: .khaleej Times