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Only 26% of people believe they will be better off than their parents when they retire
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79% of Britons' main fear in retirement is their income will be too low or that inflation will erode their savings
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Fear results in more than one quarter (27%) of those with private pensions increasing their contributions in the last 12 months
New research[1] from Schroders, the global asset manager, reveals that just 26% (10.3 million) of Britons believe they will be better off than their parents' generation when they retire. The findings reveal that 44% (17.2 million) of people believe they will be worse off in retirement than their parents, fostering feelings of jealousy of a perceived ‘golden generation' of pensioners that have benefitted from significant gains in the value of their property and generous final salary pensions.
The biggest fear (79%) Britons have about retirement is having too low an income to fund their desired standard of living or inflation eroding the value of their savings. While one in 20 (5%) cite their biggest fear as being forced to sell their home. In response to these fears, Britons with pensions are desperately trying to boost their retirement income by increasing their monthly contributions. Over one quarter (27%) of private pension holders have increased their contributions in the last 12 months. Of those willing to disclose the additional amount they were investing, the average monthly increase in contributions was £84.
James Rainbow, Head of Marketing UK, Schroders said:
"There is a fear amongst many in employment that their standard of living and income will drop dramatically in retirement. With the closure of final salary schemes, reduced annuity rates and continued inflationary pressures many Britons feel they will be worse off in retirement than their parents. While the ‘golden age' of pensioners that benefitted from rapid house price inflation and generous pension schemes is well behind us, millions of people recognise they will need to work longer and invest more if they are to have sufficient incomes to fund their retirement."
Less than a quarter (22%) of Britons are confident they will have sufficient reserves of income to stop working, particularly given the current level of economic uncertainly. As a consequence one in five (21%) people are planning to extend their anticipated retirement date. Of those planning to extend their retirement, they anticipate working on average another six and a half years, which would see millions of Britons working well into their seventies.
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