Britons are facing a ‘mid-life savings crisis, Zurich has warned, after research by the group indicated a third of Britons aged 35 to 39 – equivalent to about 1.31 million people – have no pensions savings at all.
The survey of more than 1,000 adults, which was carried out by YouGov on behalf of Zurich earlier this year, suggested financial pressures could be forcing some people to start saving later.
The situation was bleaker still among the so-called Millennial generation as almost two-fifths (37%) of those aged 25 to 34 – equivalent to some 3.2 million adults – are not saving into a pension, the survey found.
Zurich head of retail platform strategy Alistair Wilson (pictured) said: “Rising rents and house prices, combined with years of low wage growth, have made it harder than ever for people to save.
“With the cost of living rising, some people appear to be putting off saving into a pension, or not saving at all. But by delaying saving into a pension, a substantial number of Britons could end up with an inadequate income in retirement.”
He added: “Britons reaching 40 with no pension savings could be forced to work much longer to achieve a secure retirement. Even those nearing their 30s without a pension should not assume they can make up lost ground at a later age, no matter how far off retirement may seem.”
Wilson suggested key lines advisers could use to focus their clients on boosting their pension include: ‘It’s never too early (or late) to start saving’; ‘Take advantage of tax relief’; ‘Maximise employer contributions through your workplace pension scheme’; ‘Investing in higher-risk funds can work in your benefit over the long term’; and ‘Consolidate pension pots from previous jobs to make one cheaper pot’.
A second YouGov survey, this time conducted on behalf of Old Mutual, has also indicated Generation X suffers from a widespread tendency to put off retirement saving. The study found 90% of the 3,000-plus 30 to 45 year olds it canvassed in July had yet to plan for retirement.
On average, respondents said they would start planning at 45- about 20 years before they expected to retire. The study also found, however, that respondents expected they would end up delaying planning by around eight years.
Furthermore, said Old Mutual Wealth chief executive Paul Feeney, when analysed in greater detail, the data revealed “a telling picture of procrastination that demonstrates the vast majority continue to put-off pension planning throughout their mid-life period”.
Feeney said Old Mutual had focused on Generation X because of concerns they are at acute risk of under-saving for their retirement, pointing to TISA research that had suggested 2035 would be the tipping point when consumers would start entering retirement less well-off than earlier generations.
“Many people want to delay pension saving and leave it for another day and it is easy to see why,” he said. “Between childcare costs, school fees, travel costs, holidays, repaying the mortgage and all the other costs we face in our 30s and 40s, it can feel there is simply no money left to save at the end of the month yet putting a little extra aside is likely to yield a much happier retirement.”