Increased unpredictability in scheduled pension contributions triggers a decline in retirement savings endeavors
A recent survey conducted by Visa and ING Germany, based on a Forsa survey, has shed light on the concerns and challenges faced by Britons when it comes to retirement savings. One of the key findings is that over a third of Gen X savers do not believe the state pension will be an option for younger generations. This sentiment is echoed by Craig Rickman, personal finance editor at Interactive Investor, who stated that fears about the state pension's future have reached young people. Confidence in workplace pensions as a main source of funding upon retirement is also shrinking. Nearly 25% of respondents said they would feel more empowered to save if pension rules stopped changing. Additionally, unsecured debt reduces the scope for building retirement savings and future financial security. A worrying trend is that 43% of respondents admitted having debt, up from 39% two years ago. Rising living costs have caused financial issues, leading people to prioritize paying rent over adding to their retirement calculator. This is particularly true for women, who lower their financial expectations for retirement due to the gender pension gap. Women have lower pension wealth than men, with an average of £17,500 compared to £37,500 for men. The gender pension gap persists despite progress from the government and industry figures. The gender pay gap, lack of retirement calculator knowledge among women, and career breaks contribute to this gap. Camilla Esmund, senior manager at Interactive Investor, stated that auto enrolment has not been enough to close the gender pension gap. Longer life expectancies make it more difficult for women to build long-term wealth. Women expect to have an average pension wealth of £150,000 upon retirement, while men expect £250,000. It's worth noting that only 18% of women have more than £100,000 in a workplace retirement calculator. The state pension is a concern for 44% of UK savers, with one in five young people not expecting it to exist. This has led to young Brits preparing to continue working into old age as their main source of income post retirement. However, it's not all doom and gloom. Nearly 25% of retirees are debt-free, and 26% of those who are weighed down by debt, average £1,750. This suggests that with careful planning and smart decisions, it is possible to secure a comfortable retirement. The survey results highlight the need for continued efforts to educate individuals about the importance of retirement savings and to address the gender pension gap. It also underscores the importance of stable, predictable pension rules to boost confidence in saving for retirement.
