Warning for UK pensioners as damning retirement cost figures released | Personal Finance | Finance
Working age people in Britain are spiralling towards retirement poverty as over a third are at risk of not being able to cover the cost of their basic needs, shocking new research has found. A whopping 34% of people aged 22 to 65 do not have sufficient retirement incomes based on their savings and spending behaviour, Scottish Widows and Frontier Economics revealed.
The “national retirement forecast” model pinpointed part-time workers are being particularly at risk, as those earning less than £10,000 are not atuomatically enrolled into a workplace pension. Compounding this, the report found that over a third (38%) of employees have little to no understanding of the pension-related benefits their employer offers.
Scottish Widows and Frontier Economics analysed the views of 1,000 senior decision makers with responsibility for pensions at their firms and 2,000 employees across a range of sectors.
The insurance company called for minimum contribution rates to increase, and warned that people’s lack of knowledge around pensions is pushing them towards retirement poverty.
In small firms, 41% of people had little to no understanding, with 38% of those in big businesses, and 36% in medium sized businesses.
Over one in 10 (11%) firms also said their employees are not engaged with their pensions, rising to 20% in small firms.
Graeme Bold, managing director of workplace and intermediary wealth at Scottish Widows, urged more people to engage with their pensions and for pension providers to aid in this process.
He said that pension apps, connecting financial products in one place and using “gamified” tools, can be helpful.
He said: “A workplace pension can be the most powerful tool people have to shape their financial future, but low engagement is holding people back from taking their best shot at long-term saving.
“There’s a broader opportunity for pension providers, employers and those managing employee wellbeing to help them make the most of this workplace benefit.”
