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29 Dec 2017

Two in five workers over 50 only ´occasional´ savers

Workers are expected to reach their peak earnings around the age of 51, yet more than two in five (42%) of those aged 50-59 describe themselves as only “occasional” or “absent” savers, according to research from Aviva.

Over a third (38%) of those aged 60-69 fall into the same categories — either saving infrequently on an ad-hoc basis with no clear savings goal, or unable to afford to save anything at all.

Aviva´s Real Retirement Report also reveals that two thirds (64%) of workers in their fifties and over half (54%) of those in their sixties — who are fast approaching or may even have passed the state pension age — are yet to increase saving into their retirement fund.

However, the UK´s “mid-life savings crisis” doesn´t stem just from an inability to save, the report says. Millions of older workers also lack a clear idea of how much they will need to save for their retirement, meaning their saving habits are not being informed by the reality of their situation.

The research shows that half (49%) of workers in their fifties and a third (36%) in their sixties have not yet worked out how much money they will need to retire.

Lindsey Rix, managing director of Savings and Retirement at Aviva, commented: “It is worrying to see so many of the UK´s older workers in the dark over how much they need to save to afford a comfortable retirement. Planning and provisioning for retirement can be a great unknown, and complicated for many, but burying your head in the sand will only worsen the situation.

“As the cost of living creeps up and wage growth continues to slow, saving for retirement in the current climate is particularly challenging. For many older workers supporting family members including children and parents, saving for retirement can all too easily take a back seat in terms of financial priorities.

“These findings show the importance of industry and government taking action to help consumers become better informed and active savers. This includes using auto-enrolment to encourage contributions from a younger age; implementing the pensions dashboard so that people can view their savings and track their progress in one place; and using concepts like a mid-life financial MOT or career review to help those in their fifties take stock and plan for later life, including health and wellbeing as well as financial priorities.”

Copyright © M2 Bespoke 2017

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