Citywire for Financial Professionals
Share this page:
Stay connected:

Citywire printed articles sponsored by:

View the article online at

Pension saving hits new low as 'unrealistic expectations' persist

Fewer than half of us are saving enough to fund our retirement, according to a report from Scottish Widows.


by Michelle McGagh on May 21, 2012 at 11:37

‘They are making some effort to prepare for their retirement, while also recognising the need to do more,’ it said.

‘Most still have time to increase their savings to a more adequate level. However, with few having access to DB provision the future for them is relatively uncertain, and they need to have confidence in the financial system.’

Seriously under-saving

The people in this group are ‘sleepwalking into retirement’ despite 51% taking home salaries of over £30,000 and 3% taking home an income of over £100,000.

Typically aged under 45, this group has a high number of self-employed people. Many have started pensions with an employer in the past but 23% are no longer contributing, and many are saving intermittently rather than regularly.

The group has similar retirement aspirations as those in the ‘somewhat under-saving’ bracket but 24% expect to work to 70 and beyond, although the same number expect to retire before 65.

One in five expect their retirement income to match their final earning, which the report said was unrealistic ‘unless they increase their savings dramatically’.

‘Many in this group appear to be sleepwalking towards retirement. With some evidence of an attitude of living for today, they are making only a token effort to save for retirement,’ the report said.

‘Their aspirations are relatively high, but there appears to be little evidence of taking action to achieve these aspirations. This group needs a serious wake-up call.’


People in this group have lower average earnings than the other groups, with 49% earning under £20,000 a year. Although typically younger, 26% of the group are in their 50s.

These people have less job security and are more likely to be on temporary contracts and 47% have no pension provision at all, with 80% saying the reason for this is they have no spare money.

Their retirement expectations are more modest, with half saying they would be relatively comfortable on £20,000 a year and 23% expect to work beyond 70 and 32% do not know when they will be able to retire.

The majority, 84%, of this group understands that they need to do more to secure their retirement.

The report said: ‘While the current position is very poor, this group at least recognises that it is not doing enough and that this will have serious consequences in retirement.’

Sign in / register to view full article on one page

2 comments so far. Why not have your say?

Rob Walker

May 21, 2012 at 19:42

It looks to me like if we all decided to carry on working the financial services industry would die! I object to all these 'commentators' making those approaching retirement feel somehow inadequate and unhappy if they don't have as much pension as they'd like. After all, most of us go through working life not having as much income as we'd like either!

My tip, move to France, buy a home somewhere cheap that is suitable for your lifestyle (with land, by the sea etc) and have fun. The French health service is OK, good wine at 3 euros a bottle and (mostly) civilised friendly people if you live in a good village.

report this

Colston Hicks

Jun 17, 2012 at 14:55

Figures from Financial Times Saturday September 30 1978

Gilts 'Over Fifteen Years', very suitable for Final Salary Pension Scheme Funds

Yields AER ranged from 9.70% to 13.05%

Trustees knew what to do for the good of their members.

Invest only in Gilts.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

Sponsored By:

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add to your safe senders list so we don't get junked.

Latest from Investment Basics

See all headlines


Neil Woodford slams Stobart board after bust-up

by Dylan Lobo on Jun 18, 2018 at 16:48

Sorry, this link is not
quite ready yet