Confidence in pensions for the next generation in line is in crisis, with only one in ten 30-49 year olds believing that their pension will provide them with a comfortable retirement, warns Alliance Trust.
According to data from the annual retirement confidence index, more than a quarter of British adults are not making any provision for their retirement, a six per cent increase compared to this time last year.
Women are making fewer preparations than men, with 31 per cent making no provision for retirement, compared to 23 per cent in 2006, while among men there has been a rise from 17 per cent to twenty-two per cent of those who have no pension plans in place for their retirement.
Not only are people’s personal pensions in crisis, but the biggest fall in confidence has also been revealed which is in the number of people who believe they will receive a state pension – just 35 per cent this year, compared to 49 per cent a year ago.
The least confident demographic is perhaps the least expected: those between the age of 30 and 49, in the prime of their working lives, with one in ten saying they are completely without confidence that their pensions will provide them with a comfortable retirement, and just one per cent said they are totally confident about this.
“It is worrying to see that many in the prime of their working lives are most uncomfortable about their retirement prospects.” said Hyman Wolanski, Head of Pensions at Alliance Trust.
“It is clear that serious action needs to be taken to tackle the problem to break this trend. Our research shows it is now more important than ever for people to ensure they have a proper pension plan tailored to suit their individual circumstances. For example, locking regular sums into a pension might often be put off in favour of more immediate financial demands but with the range of saving products available today, there is now much more flexibility than ever in how people can save for their future”.
In the 18-29 age bracket, the number of those who feel totally unconfident about providing for their retirement drops to just six per cent, despite the fact that more than half do not have any form of pension.
Hyman Wolanski continues: “One important point for them to remember is that pensions aren’t the only way to save for retirement; other more accessible savings products, such as ISAs, could be more appropriate earlier in their savings life, with the option to transfer some of this money into their pension fund later on in their career. But irrespective of the means, it is important action is taken and serious provisions are made.”
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