Most Brits have no clue about pension payments and two in five can’t even find their savings
The working population of Britain is woefully underprepared for retirement, with the majority unaware of what payments they’re entitled to or how to access their funds, according to new research.
The money.co.uk study investigated Brits’ understanding of pensions, finding that four in five don’t know what weekly payments they’ll receive during retirement, while a further 13% didn’t realise they were entitled to anything at all.
Perhaps more alarmingly, almost a quarter of respondents (24%) admitted they’d struggle to locate and access their pension pots, with another 18% stating they had “no idea” whatsoever.
The study also asked how Brits were planning to finance their future, aside from working one regular job, and traditional methods such as making use of savings accounts (38%) and investing in stocks and shares (15%) were most popular.
But as many as one in 10 said they plan to – or already do – work a second job to help in later life.
How Brits aim to make money to help plan for the future, outside of a main job:
|Putting money in a savings account||38.4%|
|Investing in stocks/shares||15.2%|
|Investing in property||11.5%|
|Awaiting an inheritance||10.3%|
|Foreign exchange trading||2.7%|
But, with the ever-increasing cost of living putting a strain on the younger generation, it seems as though the 16-24-year-olds and 25-34-year-olds are putting away a higher proportion of their earnings for the future than those aged 35-54. With the over-55s edging closer to retirement age, this proportion then jumps back up again as they approach the end of their careers.
How pension contributions vary with age:
|Age range||Average proportion of salary put into pension pots each month|
Salman Haqqi, Personal Finance Editor at money.co.uk said: “A pension is a vitally important tool for helping provide a stable income in later life. Once people retire, this often forms the majority of their income, so the nine in 10 people who were unsure about their future may want to re-familiarise themselves with the systems, as well as the location of their pension pots and log in details, to avoid any potential issues that could arise in the future.
“The basic state pension payment is £137.60 per week, with this amount rising to £179.60 for younger workers, as outlined on the government’s website. However, 25% of Brits are missing out on potential further payments in the future as they have opted out from additional personal or workplace pensions. It is certainly worth assessing your options to provide the right balance between having enough disposable income now, and ensuring financial security in the future.”