British pensioners are the least prepared to retire in the world, according to a new study which reckons today’s workers approaching retirement will see their savings exhausted in seven years after they retire, which puts them top of a global league table for not having saved enough cash for their later years.
The issue is compounded by the fact British pensioners expect to live for at least 19 years after retirement which means they are facing 12 years of hardship when their savings run out, said the report by HSBC Bank, which compiled the report.
Christine Foyster, HSBC’s head of wealth development, said: “The concept of retirement is evolving all the time, and we know many people aren’t prepared and now we know by just how much.
“People are living longer, through tougher economic times, but their expectations about their standard of living in retirement remain unchanged. They are putting off the inevitable, which is the reality of significant cuts to their living standards in their twilight years, after their savings run out.”
The study questioned 15,000 people in 15 countries and, the bank predicts, show that increasing numbers of people will not have saved enough as life expectancy rates increase.
To avoid this savings shortfall, many people will have to start saving more from a younger age to avoid a reality check when they retire as the study revealed that retirement cash ran out at the halfway through retirement for most people.
The result of this failure to save enough means that many pensioners will never get to realise their big retirement dreams, such as going on grand holidays, taking up new hobbies and carrying out home improvements.
More worryingly, when the savings run out the pensioner is woefully unprepared for any expenses they may face should they need care in the long term.
The problem looks set to get worse as an average 56% say they are not prepared for paying for long term care, and the figure rises to 66% in Britain.
Astonishingly, 19% of workers around the world are saving nothing for their retirement – but this figure rises to 34% of UK workers.
That statistic is even more worrying since 63% of British workers say they fear hard times financially in retirement, compared to 57% of respondents globally.
Another 31% of British workers say it looks likely that they will be made to past their expected retirement age.
Despite the fact that many realise that they haven’t saved enough for retirement, British workers strongly believe that they will still retire at 65.