A generation of Britons faces a cash-strapped retirement as people ignore or refuse to respond to the changing nature of pension provision in the UK, a new report from HSBC has revealed.
Members of the UK’s Ostrich Generation know they will live longer than previous generations and understand that traditional state and company pensions will no longer be so generous. But despite fears that they are under-prepared – and with expectations to ease into semi-retirement in their mid-50s before stopping work at 62 – the majority are not making any plans about how they will fund their retirement.
The findings come from a new HSBC report, The Future of Retirement: The power of planning.
Britons who have a financial plan have retirement savings and investments worth over four times as much as non-planners, HSBC found, and higher expectations of a happy and exciting retirement.
Of the 1,000 people questioned in the survey, half, 49 per cent, expect to be worse off in retirement than their parents. And 17 per cent do not know what their main source of retirement income will be, with a further 21 per cent saying they will rely on the state pension.
Of those Britons expecting to be worse off than their parents in retirement, three in five say the major reasons are that state and company pensions are not as generous as for previous generations.
As a whole, 68 per cent of respondents are worried about coping financially and 48 per cent fear they are not saving enough for their retirement, rising to 57 per cent among women in their 30s and 40s.
But despite all this, only 39 per cent of Britons have put a financial plan in place to provide for their futures and 68 per cent are worried they are not financially prepared.
Those Britons with plans have accumulated on average £123,000 in their savings and investments for retirement, compared to the average UK household of £53,000. Non-planners will have around £28,000.
David Wells, head of investments, pensions & savings, HSBC Bank says: “The emergence of this Ostrich Generation is a real concern. Britons know that they need to plan and save more for their retirement, yet are not turning this knowledge into action.
“People need to look around and take proper stock of what they need to do – they can no longer totally rely on the state or their employer to provide for them. In the 21st century it is all about taking individual responsibility.”