10% of over 55s have nothing in place for retirement

Published on in Banking News by

Almost 15 million people in the UK admit to ignoring the subject of pension planning because they find the subject too confusing, a new study reveals.

bank accountHowever, while this number, a total of 30% of all UK adults, admit that planning their own pension is confusing, a further 60%, that is almost 30 million people, admit to being confused by the whole topic of pensions altogether.

The new research from the Money Advice Service shows that more than 12% of people aged over 55 who are not yet retired have not put plans in place for the day that they stop working, and do not know how their lifestyle will continue to be funded. A further 8% don’t even think that they’ll ever be able to afford to retire from work.

The worrying figures suggest that the majority of UK adults could be storing up trouble for themselves in later life and end up struggling financially in their retirement years.

Retirement and pension expert at the Money Advice Service, Jackie Spencer, said: “Retirement is inevitable, so how you plan to fund it is just too important to ignore. It’s really concerning that more than one in ten over 55s who aren’t retired have not thought about how they will fund their retirement.”

The report revealed that 55% of UK adults don’t understand the tax benefits of having a pension or how their pension contributions are invested, and 36% don’t know what is meant by an ‘annuity’.

Even those who have a pension but who aren’t retired admit to being in the dark about how things will work, with 17% saying they have no idea how to work out what income they will receive when they retire.

Ms Spencer added: “The good news is that it’s never too early to start saving for retirement. As employees are now being automatically enrolled into workplace pensions, this will provide a solution for many.”

In these tough economic times, planning in advance is crucial. Comparing bank accounts is a good start when it comes to building up a pension for your later years.

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