Money, Cash & Finance

A survey recently commissioned in the UK by the BBC suggests that up to 50% of adults ranging between 20 and 60 years old aren’t making any contributions to a pension.

The survey of 1,358 people by GfK NOP – a leading market research and consumer insight agency, suggests the situation was worst among under 30s, with around 1 in 3 – 36% putting anything aside towards pension schemes or savings accounts.

Many young people cannot afford to make contributions, with a number trading it with paying off debts such as credit cards or loans.

The survey showed that 45 percent of participants aged between 41 and 60 are not contributing towards a pension.

There are many reasons for this, including the large number of unemployment due to redundancy in the current climate, but also as a result of the high levels of women that left employment at pregnancy and never joined a pension scheme.

Many of the younger people claimed that the reason they had never started with a pension was because they didn’t know how to go about setting one up, or felt that they had many years between now and retirement to begin worrying about it yet.

While 36% of respondents aged 30 or below currently have a pension, around 50% said that they were confident they could have a comfortable retirement.

Chief executive Ed Gardner of UK retirement and savings at pension and insurance firm Metlife, said young people should not presume that this would be the case. The days of generous final salary pension schemes are becoming less frequently available, which is likely to cause this new generation of pension planners to rely on defined contribution pension schemes, which tend to provide lower returns.

“Unfortunately the tide has turned and younger people face even more challenges in saving for their retirement” said Mr Gardner.

Those that are still without a pension should start thinking about what they will need to save in order to retire at 65 and have enough money to last for around 25 years.

Mr Gardner said: “What you will find is that many people are currently saving nowhere near enough,”.