Figures released last month have revealed that over one in ten (11%) of working people have yet to begin paying into a pension pot. Worryingly, this includes nearly one in ten people in the 51-65 age bracket. The average age at which most people expect to begin saving towards their pension is 46, and almost 40% of people under 50 are worried that what they have saved will only just be sufficient to support them during their retirement.
One in five people in the same age group admitted that they will need to continue working beyond the age they planned to retire as they know they won’t have enough saved. The study also revealed that most people hoped to retire at 62, an age which many in the pensions industry see as being unrealistic due to increased life expectancy and retirement on average now lasting more than twenty years.
The study also shows that planned retirement age shifts later in life as people get older. Those aged between 21 and 30, for example, on average plan to retire at the age of 60 years and six months. In contrast, those in the 51-65 age bracket expect to retire at 62 years and ten months. Both of these fall considerably short of the current State Pension ages for both age brackets. However, almost 90% of over 50s are on track to being able to retire when they reach State Pension age, and most say they believe they will be able to live comfortably once they retire.
The average age at which people currently start putting money away for their pension is 27, and over 50% of people under 40 expect their retirement income to be either equal to or less than the average income of this year’s retirees. This equates to an annual pension of no more than £17,700 for those up to 45 years away from ending work.