New research finds more than two fifths (43 per cent) of 35-54 year olds who don’t have a private pension have resigned themselves to never having enough money to put into a pension, with only one in ten (11 per cent) 35 to 54 year olds confident their savings mean they will be financially secure throughout their retirement – according to Learn to Trade, the UK’s leading Forex education provider.
The research – conducted by YouGov with over 2,000 consumers – shines a worrying light on retirement prospects, with only four per cent of those without a private pension confident that the state will support them in their retirement.
The study points towards some key trends, which Learn to Trade believes means the UK will be facing UK pension crisis by 2028, as the majority of Gen X approach retirement age, without a pension pot that matches the cost of living:
· Lack of planning ahead: 43 per cent of Brits who are not yet retired are not saving for retirement in any way.
· Social divide: More than half (56 per cent) of the working class who aren’t retired (C2DE) are not saving in any way for retirement versus just 34 per cent of the middle class (ABC1), marking a huge 22 per cent difference. Interestingly, cost of living came in as more of an issue for the middle than the working class, with more of those from the middle class without a private pension saying their cost of living is currently too high for them to pay into a pension (30 per cent vs. 17 per cent).
· Women hit hard: 47 per cent of non-retired women are not saving in any way versus just 39 per cent for men. They are also more likely to have given up on having a private pension than men (30 per cent vs. 26 per cent) and are also hit harder by cost of living in relation to their ability to pay into private pensions (24 per cent vs. 22 per cent). This culminated in a stark ten per cent divide between non-retired women and men being worried about their retirement’s financial security (56 per cent vs. 46 per cent).
· Parents missing out: Households with children are also feeling the strain. Parents are worried about their financial security during retirement, with a quarter (24 per cent) who do not expect to have any savings or inheritance by the time they retire and 29 per cent who are worried their retirement savings won’t go far enough.
Nigel Jump, professor of economic development at Bournemouth University comments, ‘Learn to Trade’s research reflects the current economic uncertainty, with households and individuals losing trust in financial institutions and the government. Pensions used to be a long-term commitment, with security and sustainability invested on both sides. Sadly, whatever you think about cause and effect, the “Great Recession” of 2008/9, its aftermath, and the regulatory and tax changes to private and public pensions have punctured confidence in institutional promises. Moreover, with interest rates held so low, for so long, a reluctance to make long-term financial commitments is to be expected.’
Greg Secker, CEO at Learn to Trade encourages Brits to take action. Secker says, ‘We would encourage all Brits – and in particular Gen X – to be evaluating how they can best plan for their future. With a growing lack of confidence in private pensions and their vast deficits, Brits should be looking at alternative methods of securing their financial future. It was great to see a third of Gen X’s considering alternative saving methods, such as Forex trading or investing in a shares and bonds. Our advice is to start future planning as soon as your disposable income allows you to do so.’
Further reading on pension crisis
