Over a quarter of savers don’t believe they'll have enough to live off in retirement

Over a quarter (26 per cent) of savers who have a workplace pension do not think that their current level of pension saving will be enough to live off in retirement, a survey from the Pensions and Lifetime Savings Association (PLSA) has revealed.

The survey also found that those aged between 35 and 54 were the most concerned, with 29 per cent responding that they were worried that they would not have enough to live off compared to 20 per cent of those aged 55 and over.

Women were found to be more worried about their future savings than men, as 31 per cent of women reported concern compared to 21 per cent of men.

Concern was also found to be more present in low-income households, as 35 per cent of those surveyed whose total income was up to £14,000 and 31 per cent with an income between £14,000 and £28,000 stated their concerns, a figure which drops to 20 per cent for households with an income over £48,000.

Savers’ intentions surrounding their pension were also investigated by the survey, with 21 per cent of respondents said they saving for a pension that met all their basic needs, 41 per cent for a pension that would allow them to do some of the things they would want to do in retirement, and 33 per cent for a pension that would allow them to do most of the things they want.

When asked to think about what their current level of pension saving will provide for them in retirement, 12 per cent said that they did not know which Retirement Living Standard they would achieve and 1 per cent said that they never plan to fully retire.

The PLSA also included its recommendations to help savers achieve a better standard of living in retirement, calling on the government to increase the level of automatic enrolment contributions from 8 per cent to 12 per cent in the early 2030s.

PLSA director of policy and advocacy, Nigel Peaple, commented: “We have long argued that current contribution levels are not likely to give people the level of retirement income they expect or need.

“As the government seeks to ‘level-up’ the economy, narrowing wealth disparities between regions and different demographics, we think now is the right time for the government to commit to levelling up pensions, gradually, over the next decade, in three affordable steps.

“First, the government should implement its plans of extending pension savings to the over-18s, and commence pension saving on each pound of savings, from the mid-2020s.

“Then around the end of the decade, pensions should be 'levelled up' so that employers match employee contributions.

“This would mean 10 per cent of pay goes into pensions but would not require extra contributions by workers. Finally, when affordable, in the early 2030s, contributions should be increased to 12 per cent.”

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