80% working age individuals not saving adequately for retirement - deVere Group

A majority of 80 per cent of working age individuals are not adequately saving for their retirement, the deVere Group has found.

According to the firm, eight out of 10 of all new clients who were seeking financial advice, taken on by deVere Group in 2016, were not saving enough in order to have a comfortable, comparable lifestyle in retirement.

This is “very worrying indeed” deVere founder and chief executive Nigel Green noted. He continued to explain that last year only 20 per cent of new clients were saving adequately to enable themselves to retire at their preferred age and with enough financial backing to last throughout their retirement.

The company advised that, in general terms, people aged between 25-34 should be saving between 15 and 25 per cent of their income, 25 to 35 per cent for those 35-33 and 34-45 per cent for those in the 45 to 54 age bracket. Those aged 55 and over would require a “considerable amount more”.

Green commented: “Too many people have a ‘live for today’ attitude. Whilst this can be applauded in certain respects, what happens when ‘tomorrow’ does come and you want to retire?

“The ‘head in the sand’ mentality when it comes to saving for retirement is very concerning. This is particularly the case because we’re living longer, meaning the money we accumulate has to last longer; in the future, it’s unlikely that governments will be in a position to support older people like they have done for previous generations; there is a looming health and social care crisis; and because of the growing deficits in company pension schemes.

“There needs to be a seismic shift in the savings culture. Otherwise many of today’s working population are going to reach retirement and find they have to significantly downgrade their lifestyle and/or continue working longer than they had expected and hoped, due to a lack of retirement savings.”

“In addition, the financial advisory industry itself has a role to play by working to restore the public’s confidence in the wider financial services sector. Once trust is fully restored, more people are likely to actively seek professional financial advice, which will considerably increase their chances of being financially secure in retirement.”

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