Written by Karen Bryan
Recent research by Lending Works highlights that 34% of non-retired UK residents are not saving any money towards their retirement. This doesn’t bode well for their post-work years. Even if they have paid the required 35 years of National Insurance Contributions to be eligible for the full new State Pension of £155.65 a week (which is payable to those retiring since 6 April 2016), it will be hard to achieve a comfortable retirement on that amount of cash.
Women lag behind men when it comes to saving for retirement, with 41% of women compared to 28% of men, not putting money into a pension pot. This doesn’t surprise me, as there is a higher percentage of women in part-time work and in lower paid jobs.
The survey also highlights that 83% of full-time UK workers pay into a pension, falling to 54% for part-time workers.
Marital status also has an impact on pension savings, with 71% of those married or in a civil partnership making pension contributions, versus 59% for those who are separated or divorced. This brings to mind the old saying “two can live more cheaply than one”.
Worryingly, 22% of those taking part in the survey believed that they would never be able to afford to retire. As you’d anticipate, the figure was higher for women at 24%, compared to 18% for men. I do wonder, will there will be work available for people who need, or wish, to work beyond the State Pension age?
There are also regional variations, with 27% of those living in the West Midlands believing that they wouldn’t be able to retire, compared to 14% in the North East.
As you’d expect, those in lower-income groups were less likely to be able to afford to retire. 33% of people with an annual income between £5,000 and £15,000 thought retirement was unattainable. Whereas, in the £60,000 to £100,000 income bracket, the figure fell to 4%.
It’s all very well to say that people should save more toward retirement. But if you are on a low income of under £15,000, it’s unlikely that there will be much, if any, cash left after basic living expenses are paid.