Record number of UK workers adequately saving for retirement

The amount of people in the UK saving enough for a comfortable retirement has reached a record 59 per cent, research from Scottish Widows has revealed.

This represents a 4 per cent increase from 12 months ago, when the figure stood at 55 per cent, suggesting that April’s minimum pension contribution increase had an “immediate positive impact on saving habits”.

Scottish Widows 15th annual Retirement Report deemed the minimum savings rate for a comfortable retirement to be 12 per cent of an individual’s income.

Despite the increase, 22 per cent of UK adults expect they will never be able to retire, equating to around 8 million people.

Furthermore, the proportion of people not saving any income for retirement has remained at 17 per cent.

Scottish Widows head of policy, Peter Glancy, warned that there was still work to be done to fight pensioner poverty. He commented: “One in five people say they’ll never be able to retire.

“With no further step-ups in auto-enrolment contributions planned, this is a timely reminder that bold action must be taken to ensure no-one has to face the spectre of poverty in their later years.”

Scottish Widows’ study found that people who had no pension savings are more likely to think they’ll never be able be able to retire, while over half (51 per cent) expected to rely solely on their state pension.

The average income of someone who does not plan to retire was £21,500 per year, way below the national average of £27,396, with 85 per cent concerned about not having enough savings for retirement, compared to 53 per cent of the wider population.

The research highlighted that the number of under-30s has increased significantly since the introduction of auto-enrolment, but three in five are saving below the recommended level for a comfortable retirement, with 14 per cent not saving anything.

Glancy concluded: “While the past 15 years have proved that things have been changed for the better, auto-enrolment alone won’t avert a pension crisis in the UK. Government and industry need to take the next step together and stop pretending the long-term savings challenge can be solved in isolation.”

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