Research from pension giants, Aegon, has found that many workers who are due to retire in the next ten years are not contributing towards a pension plan.
The group’s study shows that 30% of people aged over 55 are facing retirement without a personal or workplace pension to fund them. For those who do contribute towards a pension fund, Aegon found that 40% have no idea how much money they would receive from their nest eggs to retire on.
A spokesman for the company, Duncan Jarrett voiced his surprise at the findings, and mentioned that along with so many over-55s being so underprepared for retirement the results also showed some regional trends.
‘Many industry analysts and the media have previously claimed there is a pensions time bomb ticking in the UK, but our study suggests time has almost run out.’ He said.
Although almost a third of over-55s questioned by Aegon said they didn’t have a pension plan, not all people depend on pensions to fund their retirement. Many prefer to invest the money themselves or have opted for Isas. Others have properties that they receive rent from and other hope to fund retirement by selling off their businesses.
However, worryingly half of the over-55s surveyed admitted that they didn’t have any plans for funding their retirement, and if they were suddenly become out of work before the state pension age they didn’t have any back-up plans for providing an income.
The Aegon research discovered that 36% of workers between the ages of 16 and 64 were not contributing towards an active pension plan.
Many industry experts have been concerned about future generations not saving towards retirement, but the Aegon research found that more than 50% of 25 to 34 year olds were contributing towards a pension.
This figure is likely to increase as the Government’s automatic enrolment for workplace pension continues. It is due to be up and running in every business by 2018.
Whilst more younger people are saving towards their retirement, there is concern that they aren’t putting enough money aside to be financially comfortable. Many people are seriously underestimating how much money they will need to retire on, and over half of the 25-34 year olds think they will be able to retire at the current state pension age of 65 even though it will have increase to 67 by 2028.
Less than 1 in 10 (8.2%) had a more realistic view of retirement, saying they expected to retire at 70. 13% of 16 to 24 year olds also predicted they would need to continue to work until they’re 70.