Around a third of savers are aware they are not saving enough for retirement, supporting the findings of the Pension Commission’s Interim Report.
This research by TPT Retirement Solutions, found that around two in five respondents believe they will have sufficient savings to cover the cost of their basic needs in retirement, but only 3 per cent think they will have enough to live comfortably in later life.
More worryingly less than a third of people (29 per cent) think that their savings will last throughout their retirement.
The Pension Commission’s Interim Report found that the UK has one of the lowest gross national savings levels, as a percentage of GDP) against comparative economies, with around 15 million people currently under saving for retirement.
This suggests that many savers share the Commission’s concerns around the scale of the retirement savings challenge facing the UK, indicating there would be broad public support for measures aimed at improving retirement outcomes.
TPT Retirement Solutions head of policy & external affairs Ruari Grant, says: “Our research shows that the public agrees with the experts. Last week the Commission highlighted the scale of the under-saving problem, and while we might often imagine people are unaware of this, that is not the case, meaning the Commission has a clear mandate to pursue meaningful reforms.
“Automatic enrolment has created strong foundations for retirement saving in the UK, but at current contribution levels many savers will still face inadequate outcomes in retirement. The focus should now turn to ensuring the pensions system delivers the retirement people expect and deserve.”
TPT also welcomed the Commission’s focus on decumulation. TPT has previously found that nearly 70 per cent of DC savers would be interested in a solution that provides a sustainable inflation-linked income in retirement. With only a fifth (22 per cent ) of savers say they are willing to pay for financial advice, effective frameworks at the point of retirement are essential to improving outcomes.
Grant adds: “Good retirement outcomes do not simply depend on how much people save during their working lives. Savers also need straightforward, reliable ways to access and use their pension savings in retirement, without having to navigate unnecessary complexity or make difficult financial decisions alone.
“The debate has moved beyond encouraging people to save. The challenge now is ensuring the system people are saving into is capable of delivering a lasting retirement income.”