Many savers fear they have not set aside enough money for retirement as new research shows the size of pension funds is shrinking.
The average pension fund is £70,900 for those aged 55 to 64 years old.
That’s down £43,800 down from the recent peak of £114,700 in 2102-2014 and £35,200 less than between 2014 and 2016.
From 2008 to 2012, pensions on retirement averaged around £98,000, says data published by provider Equiniti.
£154,000 public v private pension gap
The report explains the collapse in fund values raises fears that millions could enter retirement without the means to pay their bills and leaves them relying on state benefits to cope financially.
The data also suggest just one in four 55 to 64 year olds has savings of £8,500 or more – down from £20,700 in 2016.
There’s also a huge savings gap between the public and private sectors.
Average pension savings for those nearing retirement in the private sector are £27,000, compared to £181,100 in the public sector.
Duncan Watson, CEO of Equiniti’s pension business, said: “It is alarming to see so many people within 10 years of reaching state pension age are looking likely to enter retirement with so little reserved in their occupational pension savings.
Warning for younger savers
“Innovation through auto-enrolment and pensions dashboards will transform the pension industry in this country, but this will be of little comfort for those whom will largely be unable to benefit from the reforms.
“Nonetheless, it should act as a warning light for those just starting out in their careers and on their pension-saving journey. Starting to contribute to a pension is the hardest part in having to sacrifice a chunk of the monthly pay-cheque, but it will become second nature and will make a huge difference to the quality of life people can afford forty years down the line. Your future self will thank you.”
Equiniti manages pensions for 9 million retirement savers and pays around £25 billion to one in four UK retirees in pension and annuity benefits each year.