Rising living costs are affecting ability to save

Research from life insurer, Scottish Widows, has discovered that one in three Britons is unable to save for their retirement.

The survey, which monitors the retirement provision of people aged 30 and over, highlights the fact that many people are worried about how they will manage financially when they retire.

The survey, which was carried out by YouGov in March and questioned 6,381 people, showed that just 51% of people are saving enough money to provide a sufficient income during retirement.

The credit crunch and the rising cost of day-to-day living is clearly having an impact on people’s ability to save, according to one report.

The research discovered that those who are paying enough into a pension are most likely to be male, over 50, working in the public sector and earning between £30,000 and £50,000.

Those who are not saving towards their retirement are most likely to be women, as are those with children under five, the self-employed and those in debt.

However, the research did show an increase of 2% in the number of people making adequate retirement provision compared with last year.

Commenting on the findings, Ian Naismith, head of pensions market development
at Scottish Widows, said it is worrying that Britons are not doing enough to prepare for their retirement but was encouraged by the slight rise in pension savings.

Mike O’Brien, Pensions Minister, is keen to promote saving early as this will make a difference to retirement incomes.

However, Tom McPhail of Hargreaves Lansdown, believes the situation will get worse before it gets better.

Household finances are under severe pressure so pensions are likely to be compromised. The current market conditions present a challenge to the pensions industry to make sure investors don’t fall behind in their retirement savings, said Mr McPhail.

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