The Financial Conduct Authority recently carried out research* into the financial arrangements of just under 13,000 consumers in the UK.
The results make for worrying reading. One of the findings that really stands out is that 31% of UK adults have no private pension provision, meaning they may have to rely solely on their state pension in retirement.
The report highlights that many people find pensions very confusing and have no idea what they will have to live on when they retire. The full state pension is currently £159.55 per week, but is only available to those who have a complete record of National Insurance contributions.
The study also revealed that only 35% of 45 to 54-year-olds have given serious thought to how they will manage in retirement. The sad fact is that the longer people leave it before addressing their pension needs, the harder it is to achieve a reasonable level of income in retirement.
Putting pensions into perspective
Pensions auto-enrolment has been a very positive initiative that has resulted in far more young people paying into a pension than ever before. However, if workers only put in the minimum amount, this is unlikely to be enough to build up a sizeable pension.
The self-employed often regard their business as their pension, or say that they plan to keep working as long as possible. However, this is a high-risk strategy, as they might not find a buyer when they want to sell, or may find that ill-health prevents them soldiering on.
So, if you’re self-employed, an employee, work part-time, run your own business or have accumulated pension pots with past employers, we can offer you advice about saving for a pension.
After all, retirement should be an enjoyable and fulfilling stage of life, not a time spent worrying about money.
*FCA, Financial Lives Survey, Oct 2017