Piggybank raiders headed for pensions crisis
One in five of the world’s workforce are dipping into savings to pay off debt, a new study has revealed.
Over 20% of workers have raided the piggybank in the last year to lighten their burden of debt, whilst 13% have stopped saving entirely.
In the UK, China, the US, and India, savings have been shown the door as consumers struggle to maintain their current standard of living.
The poll, by HSBC, has exacerbated fears that the world’s economy is hurtling at full speed towards a pensions crisis and whoever was responsible for fixing the brakes fell asleep on the job.
Nine out of ten people feel unprepared for retirement, HSBC found, with three quarters unsure where there income will come from when they retire.
According to HSBC, a “perfect storm” is brewing amidst a potent mix of rising life expectancy, falling investment returns, and declining pension contributions.
Thirteen percent of those polled confessed to having done no retirement planning at all, whilst only 27% feel they fully understand their long term finances.
Stephen Green, HSBC chairman, said: “A perfect storm is confronting pensions planning, created by an ageing population, falling pension funds values, a drop in state and employer contributions and an economic downturn which is forcing people to make tough financial choices.
Green believes governments should take action to educate citizens on the need to prepare for retirement.
“The ‘preparedness gap’ reveals that families need greater support and guidance to effectively handle their finances, not simply in schools and colleges but through ‘trusted advisers’ providing professional financial guidance” Green said.