Third of UK savers unaware of their retirement options

Third of UK savers unaware of their retirement options

The firm’s Future of Global Retirement report – which surveyed 8,000 savers across the UK, Australia, South Africa and the US – found the UK ranked lowest when it came to understanding of savers’ options at retirement.

The report – published today (16 February) – discovered with the increasing cost of living, a third (34%) of respondents are concerned they would be unable to afford their day-to-day living costs in retirement. The research revealed a gender discrepancy as 38% of women cited such concerns, compared to 31% of men.

Almost half the respondents (47%) indicated they found retirement to be a period of transition, rather than a one-off event, which was more prevalent among women (51%) than men (43%).

The research found additional differences between generations regarding the accommodation costs as one fifth of those aged 18 to 25 reported fears of being unable to afford accommodation in retirement, compared to just one tenth of respondents aged 65 years or over.

The survey also found 36% of UK respondents emphasised the importance of receiving clear and straightforward communications from their pension provider, while 34% highlighted the need for the ability to maintain control over their pensions and an option to withdraw a lump sum should they require it.

Senior director of strategic delivery Eve Read said: “In the decade since the introduction of auto-enrolment (AE), we’ve seen millions of people saving for retirement for the first time. However, despite the initiative’s success, millions still feel they aren’t saving enough into their pensions.

“In some cases, this is due to working part-time, being in lower-paid jobs or simply opting out of the AE scheme being offered by their employer. Young people and women are particularly concerned about meeting day-to-day living costs in their retirement.

“We will continue to push for and implement changes which will tackle these savings gaps and inequalities effectively. It is critical we continue to develop solutions aimed at changing the retirement landscape for the better, particularly for those who face the greatest challenges.”

Director of international Dan McLaughlin added: “Given the rising cost of living, it is not surprising that savers are increasingly concerned about being able to afford day-to-day expenses in retirement. Smart will continue to be informed by the needs of savers across the globe, particularly as these markets develop and mature as we aim to solve the biggest challenges facing the industry.

“We hope to build on these findings and continue to shape the retirement landscape through technological solutions that have savers’ wellbeing at their core.”

This follows research from Lane Clark & Peacock which found pension saving has become a much lower priority for employees, while Aon found one in five members have cut their pensions contributions over the last three months.

Source: Professional Pensions