Almost half of retirement savers have no pension or are failing to save enough and will probably have to rely on the state pension, says a new survey.
Around the same number also confess that they have no idea how much money they will need to save o fund a comfortable retirement.
The startling revelations come from a report by Skipton Building Society that tracks the financial habits of 6,000 customers.
Researchers group the customers into five groups by income, how much they are saving and how ready they are to give up work.
The results were 48% are under saving for retirement.
Ostrich mentality
Of those not saving enough, 38% claimed they could not afford to put money into a pension, while 13% said they chose not to save.
Just over half (51%) had no money in a pension and 49% did not know how much cash they should set aside.
Jacqui Bateson, Senior Propositions Manager at Skipton Building Society said: “When it comes to personal finances, it’s easy to focus on the here and now, not the future.
“However, when it comes to planning for retirement you cannot bury your head in the sand and avoid the fact that you will need to save something on top of the state pension.
“Our new Retirement Tracker reveals that the UK is very much a nation of “ostriches” shying away from the reality of saving for their retirement.”
Savings plan
At the other end of the scale, only 6% of savers are on track to hit or surpass their savings target. Many are relying on a workplace pension to provide their retirement income.
Another 6% of sophisticated savers have money in ISAs; stocks and shares, personal pensions and savings accounts.
Bateson suggests a four-point plan for retirement saving:
- Work out how much money you will need
- Set a savings target with the 50/30/20 rule – 50% of income pays living expenses and essentials, 20% goes towards financial goals and savings and 30% is for more flexible spending and non-essentials.
- Start saving now – examine spending and cancel some non-essentials to free-up the cash
- Take advice from a financial professional
