Economic downturn hits pension savings

| June 30, 2010 | 0 Comments
Economic downturn hits pension savings

A survey by Scottish Widows has found that the squeeze on household incomes, as a result of the economic downturn, has hit pension savings with nearly half of people in the UK saving less.

According to the Edinburgh-based life and pensions provider, 41% of people saved less for their pensions - many of them blaming the downturn for not being able to put funds aside.

The survey, conducted in April, established that the number of people saving enough for their retirement has fallen from 54% to 48% - the lowest figure since 2006.

However, the survey found women over 50 were worst hit with only 38% putting aside enough for retirement, compared with 52% last year.

In addition, a fifth of those that could and should be saving were found not to be putting any funds aside at all for their retirement.

Commenting on the findings, Ian Naismith, head of pensions market development at Scottish Widows, said: “The whole nation is feeling worse off than a year ago and this is really starting to take its toll on pensions savings.

“While there are signs that the economy is recovering, the nation’s saving habits paint a very different story,” he added.

Mr Naismith is therefore calling on the Government and the industry to encourage pensions savings.

In related news, last week it was announced that the state pension age will rise to 66 for men – as early as 2016.

Furthermore, the Government is to raise the option of extending it further, perhaps to 70 and beyond in the following decades.

People will be encouraged to work for longer as the default retirement age is set to be scrapped.

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