Six out of ten women are failing to financially prepare for retirement
Women still failing to prepare for retirement
Tuesday, 27 Mar 2007 16:05
Many Britons are still failing to save for their retirement, experts have warned.
New research from HSBC shows many people, especially women, do not have a suitable retirement plan.
Six out of ten women are not contributing to a pension with 31 per cent saying it was due to the fact they were not working or only working part-time.
"Despite efforts by both the government and the industry to generate more awareness around retirement planning, our research clearly shows that that there is still a lack of clarity over how to go about it - especially among women and particularly stay-at-home mums," commented Ian Martin, head of pensions and retirement income at HSBC.
Other priorities such as buying a home can get in the way of retirement planning, Mr Martin explained, but a woman aged 27 needs to contribute only £50 a month to a stakeholder pension to have a £82,000 retirement fund.
Mr Martin continued: "Even with the positive steps the reforms bring, women simply cannot afford to close their eyes and hope for the best."
Andrew James, retirement planning manager with financial services company Edward Jones, said complex pensions laws and changes to the Sipps (self invested personal pensions) system has confused people.
A year after "A Day", when reforms to the pensions system were introduced, most people are yet to take advantage of the changes.
"The hype about A Day has gone straight over the heads of the general public – the very people it was supposed to help," said Mr James.
"Those making changes to their pension provisions have been among the top five per cent of earners.
"But for those saving £50 a month into their pension plan it has made absolutely no difference. We estimate 95 per cent of people have made no changes to their arrangements post A Day," he continued.
"Ever since the proposed A Day changes were announced the government has not been very consistent with the rules," Mr James added.
"We would like to see clearer guidelines on pension rules to allow the industry time to talk to people about saving for the long–term, with assistance in educating individuals in the UK about the many positive advantages there are for saving for retirement."