The Chartered Institute of Payroll Professional's annual survey has revealed some shocking statistics that reflect the attitude of the UK population planning for retirement. The survey, which is carried out every year makes uncomfortable reading for the government in particular, as it could indicate that the UK is heading for a retirement provision timebomb.
Here are some of the findings of the survey:
66% of 20-24 years olds have no pension plans
Putting away for a pension has never been a huge priority of people in this age group. However, with the government's push on pensions in recent years meaning pensions are very much in the news due to pension freedoms and auto enrolment, it remains a surprise that two-thirds of people in this age-group have no pension plans whatsoever.
36% of 51-60 years olds have no pension plans
Even more worrying than the 66% of 20 - 24 year-olds who have no pension plans is the 36% of 51 - 50 years-olds who have no pension plans. The survey doesn't make it clear whether this includes people who have made alternative retirement provisions such as property or ISAs but if it doesn't, it makes worrying reading. Although it's not too late to start a pension in your fifties, the amount that would be needed to be put away every month to provide a 'comfortable' retirement would be quite substantial and probably out of reach for most people on average salaries.
30% not sure if their pension will be enough
Even amongst those people who have made provision for their retirement, 30% of those people don't know if this will be enough for their retirement. This demonstrates that whilst there may be some success in educating people the need for pensions, there seem to be a lack of understanding for many people about pensions. Simply having a pension doesn't lead to a comfortable retirement, it's essential that they understand how much they need to save to facilitate this.
The way forward
The government has already gone some way to tackle the pensions crisis with the introduction of auto enrolment and pension freedoms. Auto enrolment will see millions more people saving towards their retirement. However, these figures indicate that there should be more done to educate people about pensions, to ensure that they understand the need for a pension, but also understand how much they need to save for a comfortable retirement.