70% of breadwinners fail to save for retirement | Home Equity Release

Around 7 out of 10 family breadwinners do not contribute to a workplace pension, claiming they do not have enough cash left over at the end of the month.

But roughly the same number would put cash aside for their retirement if their employer matched their savings, according to the second quarterly family finances study by pensions firm Aviva.

Only 15% said they would duck out of saving for a pension when auto-enrolment rules kick in.

Research disclosed most breadwinners (72%) do not belong to a workplace pension scheme through choice (20%), because they do not qualify (4%), they do not know enough about the scheme (11%) or because one is unavailable in their workplace (43%).

For the one in five who choose not to belong to a workplace pension, 40% say they simply can?t afford to.

Paul Goodwin, head of pensions marketing, Aviva, said: ?The UK is facing one of the largest pensions crises in Europe, so it is vital that we consider what can be done now to help customers plan their retirements for the future. As the government has recognised by its planned auto-enrolment programme, workplace pensions have a significant role to play in meeting this challenge.

?There is much work to be done though as only 28% of UK family heads are currently paying into a scheme. While many people cite affordability as a reason for not joining, our research suggests that for many funds are available, but are often prioritised elsewhere.?

Of the 74% of breadwinners willing to save through a workplace pension if their employer matched their cash, the most popular contribution was 5% of annual salary (23%).

A 5% contribution of the average salary of ?25,879 could add up to a pension pot of around ?250,000 over a 44 year working life. The current average annuity pot is less than ?30,000.

?A lack of understanding around pensions is also seriously hampering take-up rates, so for the long-term interests of families in the UK, all parties concerned ? the government, product providers, employers and employees themselves ? need to work hard to ensure that auto-enrolment is a success,? said Goodwin.

Source: http://www.retirementsolutions.co.uk/70-of-breadwinners-fail-to-save-for-retirement

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