Pension saving succumbs to the downturn

The proportion of people saving adequately for retirement has sunk to its lowest since 2006 as the full impact of the downturn on people’s pension provision becomes evident.

Saving for retirement has been rising in recent years, but since last year there has been a ‘dramatic drop’, according to Scottish Widows.

Ian Naismith, head of pensions market development at the insurer, said that while there are signs that the economy is recovering, people’s saving habits paint a very different story.

‘The whole nation is feeling worse off than a year ago and this is really starting to take its toll on pensions savings, but instead of putting people off saving, the economic downturn should have been the trigger that everyone needed to save more,’ Naismith said.

The report found three categories of people that are more likely to be ‘saving adequately’ for retirement: men, those working in the public sector and high earners.

Conversely, those who are more likely to be non-savers include women, parents with three children or more and the self-employed.

Women over 50 have been hit hardest, according to the report. Only half of this group has been saving adequately. ‘While women's career patterns often make it hard to save consistently for retirement, this is the time when they should be saving the most’, Naismith said.