The seventh annual Scottish Widows UK Pensions Report 2011 reveals what it claims is "widespread and ingrained inertia" with nearly half (49 percent) of those people who could and should be saving preparing inadequately for retirement.
Levels of saving remain broadly consistent over five years, pre and post the financial crunch, with those preparing inadequately never falling below 46 percent or rising above 52 percent.
The Scottish Widows Pensions Index – looking at those between 30 years-old and state pension age who earn more than £10,000 per year – shows that only 51 per cent of the current generation of potential savers are making sufficient provisions for their retirement.
This drops to around 25 percent when those with a final salary pension are excluded. A fifth (20 percent) of people are failing to save anything at all.
This comes despite the fact three quarters (73 percent) of people recognise the need to take personal responsibility for their retirement planning, demonstrating that awareness in the importance of saving is not translating into action.
The Scottish Widows Average Savings Ratio – which tracks the percentage of income being saved for retirement by UK workers not expecting to get their main retirement income from a final salary pension – remains at just over 9%.
This is a 3% shortfall from the 12 per cent Scottish Widows believe people should be saving to achieve a comfortable retirement.
Ian Naismith, head of pensions development said: "This year's report clearly illustrates the stark difficulty we face in helping people to recognise the urgent need to take personal responsibility for their future. We need a step-change to overcome this ingrained inertia and help people prepare for their retirement."
The BBC News website reported that pension savings in the UK are at a lower level than in France, Germany and Spain.
City AM reports that "one in five workers are not saving anything at all towards their retirement".
People want £24,300 a year in their retirement, on average, in order to live comfortably, and aim to retire just short of their 62nd birthdays.
While many respondents say they could save an extra £100 a month, few are turning their words into action, the survey shows.
With an extra £58 per month, savers could make up their savings shortfalls, Scottish Widows claimed.
“That is roughly the cost of a cup of coffee every day,” added Naismith.
Nearly one in ten (nine per cent) of respondents said they will opt out of the National Employment Savings Trust (NEST), if automatically enrolled.
For the Government point of view, here is Mindful Money's report of a recent speech by the pension minister Steve Webb.
Here is a link to the Nest website.
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