Many face retirement savings ‘gap’

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UK workers are the worst-prepared for their retirement in a global study and typically face 12 years of having to make “significant cuts” to their living standards after their savings run out.

People in this country are heading for spending most of their post-work life simply scraping by, as their savings will last around seven years but their average retirement is expected to stretch out for 19 years, HSBC found.

The UK’s 12-year retirement savings shortfall was the biggest chasm in the study, which covered 15 countries. The average retirement savings gap found across the research was two-thirds of that in the UK, at eight years.

While the UK has just over a third (37%) of the average retirement covered by savings, Malaysia has the most, with 71%, with the United States and India coming second at 67%.

The UK was also beaten in the league table by countries including Egypt, China, France, Taiwan, Brazil, Australia, Hong Kong, Singapore and Canada.

One in three (34%) of more than 1,000 people surveyed in the UK said that they are saving nothing at all for their retirement and two-thirds (63%) fear financial hardship, compared with just over half (57%) of people globally.

Of those not saving for retirement in the UK, three-fifths said that high living costs are holding them back, with 35-44-year-olds saying they felt particularly squeezed. On average, UK men had just under £73,000 put by in retirement savings including pensions, while women, whose working lives are often interrupted by starting a family, had around £20,000 less at £53,000.

Researchers also said their findings suggest that people are placing too much reliance on the state to help them in their later years. One fifth (18%) of people said that the state pension will be their most important source of retirement income, but those in the UK also typically want to have a retirement income which equates to three-quarters of their earnings while they were working.  Only four in 10 people in the UK said they regularly save money, with only Egypt having a lower share of savers.

The Government is encouraging more people into saving for their later years to tackle the pension savings crisis, with landmark workplace pension reforms which will eventually see around 10 million people automatically placed into schemes. The automatic enrolment programme began last autumn with larger firms and moves are also taking place across the pensions industry to increase transparency and make pension saving more attractive.

Christine Foyster, head of wealth development at HSBC, said: “People are living longer, through tougher economic times, but their expectations about their standard of living in retirement remain unchanged. They are putting off the inevitable, which is the reality of significant cuts to their living standards in their twilight years, after their savings run out.”

How well placed do you feel for retirement?

 

 

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Chris Holland
22nd Feb 2013
0
Thanks for voting!
I have 3 pensions and 2 of them I pay 20% income tax on!! how is that fair!!!!!!!!!!!!!
gail
22nd Feb 2013
0
Thanks for voting!
when i had my children i stopped work. i was married and committed to family life. when i discovered what my husband was up to, i divorced him. had to sell the house as he had left so much debt, was left in such shock and trauma am on benefit. i dont go out or buy new clothes, we live on the basics. cant afford the repairs so try and fix things myself. i have no money other than the benefit which just barely pays for the utilities. i scrimp on electric and hardly ever has the heating on. fortunately i have an open fire, so we go wood hunting and that keeps the lounge warm. it seems so many people are really hard up at the moment. now theres the bedroom tax....what more can they take away... they have constant pay rises and cut the peoples money to do so. being on benefit wasnt a life choice i had when growing up...retirement??? i have no savings... i cant afford savings. if you havent any money, how can you save??? i will have to give my house to my son and hope he takes care of me. My hope for my future rests not on the government, they have no real interest in those that are suffering at the lower end of the scale, but on God and His provision. I have to rely on Him, who else is there???
Dawn Allen
22nd Feb 2013
0
Thanks for voting!
I am totally un prepared for retirement and it makes me feel stressed every day. I am 53,semi retired and disabled. I am trying to set up a business which will provide me with a small income.

About 4 years ago I was divorced from a very abusive husband. The settlement left me homeless. In two yeas time my ex will have to sell what was the marital home and if there is enough money pay me £45,000. Because he mortgaged the property up to the hilt and then re mortgaged it I doubt that I will get a penny.

I have 4 children and spent many years looking after them and so was out of the work place therefore I have no pension.

My income now is just under £12,000 p/a which leaves very little money spare to save.

I currently live with my partner in his property. If he were to die before me I could well be left homeless.

My income is currently made up roughly of £6,000 Disability living Allowance and £6,000 in maintenance, The £6,000 maintenance will stop when my ex husband is supposed to pay me the £45,000 lump sum in 2 years time.

I cannot see a way out of the position that I am in and spend much of my time hoping that I die before my partner..

This is not a nice place to be and not what I ever had planned for my later life.

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