The government has been called on to take "urgent action" to support more people saving for retirement, after research from Cushon revealed that nearly half (48 per cent) of savers feel ‘terrified’ about their financial future.

The research also found that nearly seven in ten (68 per cent) feel anxious about their finances, while half (50 per cent) of employees have no savings or investments outside of their pension or property.

In addition to this, nearly four in ten (37 per cent) have less than £1,000 of readily accessible savings, with Cushon warning that the potential repercussions of this situation are "stark".

Indeed, two-thirds (66 per cent) of employees said that if they lost their job, they would not survive for longer than three months, while 52 per cent said that they would not be able to last more than 30 days.

In light of the findings, Cushon argued that "urgent action" is needed to encourage more
people to build up a savings buffer for both the short and long-term, particularly around auto enrolment (AE), with some savers still "trapped out of pensions".

In particular, Cushon urged the government to reduce the earnings trigger for AE from the current £10,000 to align with the national insurance lower earnings limit, which is currently at £6,396, and to reduce the minimum age threshold to 18.

Employers were also called on to take action, as Cushon suggested that employers could introduce alternative savings schemes on an opt-in basis, or explore contractually enrolling employees into workplace savings.

Recent research from Cushon has suggested that auto-enrolling employees into workplace savings can prove effective, with a recent trial with the University of Lincoln recording an opt-out rate of "just 8 per cent".

Cushon head of policy & research, Steve Watson, commented: “There’s no denying that pensions auto-enrolment has been successful in getting people to save for retirement since it was first brought in.

“But there are still too many people being left out of pensions especially women who are more likely to work part time and so miss out due to the earnings trigger.

"Reducing the earnings trigger from £10,000 and lowering the minimum age from 22 to 18 years old are both good starting points.

“In the meantime, the current cost of living crisis is showing that we also need to help employees to become more financially resilient and this is where employers can take the initiative.

"As we have shown working alongside our friends at the University of Lincoln, offering alternative workplace savings schemes can really help employees build up a financial buffer and also offer an alternative vehicle for those who fall outside of the auto-enrolment criteria. We need to get more people saving for the future – short term and long term.” 

The government recently reaffirmed its commitment to introduce key reforms to AE, including the removal of the lower earnings limit for contributions and reducing the eligible age to 18.

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