6th September 2014
Individuals are leaving saving too late risking the need to work longer or a retirement spend in poverty.
According to the Halifax savings barometer savers aged 55 to 64 have an average savings balance of just £13,516 and savers are leaving it until their mid-50s before increasing their savings returns, just as they close in on retirement.
When compared with all savers, older people have 46% more than the average savings pot of £9,228.
However, those aged 45 to 54 have an average savings balance of £7,164 – less than the average and almost half that of those aged 55 to 64.
Younger savers unsurprisingly have less in their pot, with those aged 25 to 44 having a balance of between £2,700 and £4,000.
Halifax said these lower savings sum could represent a lack of opportunity for saving as people have not been earning for long but it is ‘more likely indicative of the higher costs of essential spending that many young families face impacting their ability to save’.
It is only in their mid-forties that savers begin to put money away but this may be too late if they are trying to save for their retirement.
Richard Fearon, head of Halifax savings, said: ‘This latest research highlights a stark difference in savings between younger savers and those nearing retirement. While we would expect to see balances grow as people get older, the dramatic rise in the last 10 years before retirement indicates that many savers are leaving it too late to boost their retirement income.
‘We know that younger families find it hard to set aside any spare cash with many outgoings already putting a strain on their finances, but saving regularly, whether it is for a specific short-term goal, or more long-term, should always be a priority.’