Fewer people saving even less for retirement
Despite changes to the pension system, continued warnings about pensioner poverty, and ongoing public debate about the future of pensions, Britons are saving even less for retirement.
In the last 12 months the number of people saving enough to provide a decent pension has fallen from 55 per cent to 46 per cent, the average amount saved has dropped from 7.9 per cent to 5.8 per cent, and the number not saving anything at all has increased from 17 to 28 per cent.
And this is despite a year when pensions have barely been out of the news.
In April there were the widest changes to the pension system in 50 years, aimed at making saving for retirement simpler and clearer.
Additionally, throughout the winter rising fuel bills and council tax led to a constant stream of news about pensioners unable to afford to heat their homes or being imprisoned for failing to pay their council tax.
And finally, the Turner Commission released its long-awaited report into the future of pensions in the UK - recommending that people work until 68 and are automatically enrolled in a company pension scheme - proposals that the government has broadly taken on board.
But today a major report by Scottish Widows shows that this period has also seen a "dramatic deterioration" in the amount of money people are putting in pension funds.
"The deterioration . . . is very disappointing when you consider how high profile pensions have been in the last 12 months," said Ian Naismith, head of pensions market development at Scottish Widows.
"In fact, our figures show that four in every five people who aren't relying on a final-salary pension are failing to save adequately for their retirement, and that two in five are saving nothing at all.
"With this level of under-saving, no-one can be in any doubt about the challenge facing us all when it comes to preparing for retirement."
And this under-funding is worst among certain sections of society.
Scottish Widow's research shows that the typical non-saver is likely to be female, a parent, in debt, and self-employed.
"Although it is too early to tell it does appear, regrettably, that the noise surrounding pensions could have led many to put their retirement savings on hold while they wait and see what happens with the much-publicised government reforms," Mr Naismith commented.
"It is essential that the decline in retirement savings is halted very soon.
"If people wait until the government's reforms come into effect in 2012, it will be a case of too little too late. Everyone needs to get onto the savings ladder as soon as possible to start working towards a comfortable retirement."
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