Debt Settlement Solution:Half of the UK has no pension
Tuesday, 7. July 2009
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A recent survey suggests that half of the UK population aged between 20 and 60 are not paying any funds into a pension.
The survey of 1,358 people, commissioned by the BBC and conducted by Gfk NOP, indicates that the situation was most severe among under-30s, with only 36 per cent putting anything into a pension scheme.
In the survey many said that they have to clear debt rather than focus on planning for retirement. With current economic conditions so tough, it seems that affordability is the main barrier for young people to consider future planning.
Among 41-to-60-year-olds, only 55 per cent are currently paying into a private pension fund.
Amongst the reasons suggested by the report for the low-uptake of private pension schemes were the growing redundancy rate and, in the case of women, leaving full-time work to have children.
Optimism
A popular response from young people involved in the survey was that they had not started a pension because they felt retirement was too far away to be worth planning for.
Despite only 36 per cent of respondents under 30 contributing to a private pension, half of all those who took part in the survey said they were confident that they could live comfortably in retirement.
The chief executive of UK retirement and savings at pension and insurance firm Metlife, Ed Gardner, said young people incorrectly assume this to be the case.
According to Mr Gardner, generous final salary pension schemes are becoming less widespread, and instead, young people will have to rely upon defined contribution schemes, providing a smaller return.
“Unfortunately the tide has turned, and younger people face even more challenges in saving for their retirement,” he said.