The UK will be facing a pension crisis by 2028, as the majority of Gen X approach retirement age without a pension pot that matches their cost of living.
The stark warning has come from Learn to Trade, a Forex education provider, which recently commissioned YouGov to look at attitudes towards to pension saving. A survey of over 2,000 people has found that 43 per cent of 35-54 year olds who don’t have a private pension have resigned themselves to never having enough money to put into a pension. It also discovered that only 11 per cent of 35-54 year olds are confident their savings mean they will be financially secure throughout their retirement.
Learn to Trade has also highlighted a wide savings class divide. 56 per cent of the working class who aren’t retired are not saving in any way for retirement according to the survey, in contrast to 34 per cent of middle class who are not putting money away into a pension. 30 per cent of middle class people without a private pension say their cost of living is currently too high for them to pay into a pension, while only 17 per cent of working class people say the same.
In addition, 47 per cent of non-retired women are not saving in any way versus just 39 per cent for men. They are also more likely to have given up on having a private pension than men (30 per cent compared 26 per cent).
Households with children are also feeling the strain. Parents are worried about their financial security during retirement, with a quarter (24 per cent) who do not expect to have any savings or inheritance by the time they retire & 29 per cent who are worried their retirement savings won’t go far enough.
However, only a small minority of those questioned (four per cent) who do not have a private pension were confident that the state will support them in their retirement.
Commenting on the findings, Nigel Jump, professor of Economic Development at Bournemouth University said that Learn to Trade’s research reflected the fact that households and individuals were losing trust in financial institutions and the government.
“Pensions used to be a long-term commitment, with security and sustainability invested on both sides,” said Jump.
“Sadly, whatever you think about cause and effect, the great recession of 2008/9, its aftermath, and the regulatory and tax changes to private and public pensions have punctured confidence in institutional promises. Moreover, with interest rates held so low, for so long, a reluctance to make long-term financial commitments is to be expected.”