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Britons 'still not saving enough' for retirement

Lisa Bachelor, The Guardian

October 21, 2003
 

More than a third of UK workers are failing to save enough for their retirement, with many relying on the state pension despite being aware that it is unlikely to provide them with a good standard of living, said the insurance industry's trade body today.

Of the 36% of people not saving enough, 80% have no savings at all although nearly a third of those said they accepted that building a decent retirement income was their own responsibility.

The survey, conducted by YouGov on behalf of the Association of British Insurers, found that 35% of those without savings thought the government should be doing more to help with retirement provision, while 21% believed it was the responsibility of their employer.

Only 2% of those not saving said they believed their state pensions would provide them with an adequate retirement income - yet 22% said they would be relying on it.

The vast majority of those questioned said they had a poor understanding of pensions and hadn't tried to calculate what they would need to save to have a comfortable standard of living in retirement.

"Our survey paints a compelling picture of people who want to take responsibility for their retirement but are worried and uncertain about how to do so," said Joanne Segars, head of pensions and savings at the ABI.

"We need to create a framework that informs, encourages and enables people to make decisions and take ownership. It is clear we have some way to go."

Last week Andrew Smith, the secretary of state for work and pensions, warned ministers that radical steps had to be taken to address a gathering pensions shortfall.

Mr Smith told the cabinet he will be coming forward with proposals this autumn to restore "informed choice" in pensions. The Treasury minister Ruth Kelly recently admitted that a lack of trust in the financial industry and general confusion meant "it is almost impossible for anyone to make rational choices right now".

Mr Smith told ministers he will propose a "financial health check" so every employee receives an annual statement outlining what they could expect at retirement from private and state schemes.

He also outlined his plans for a pension protection fund to stop company pensions from being lost entirely if the employer went bust.


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