One in three UK workers aren't saving for a pension
Wednesday, 14 September 2011 12:50
New research by the Prudential reveals that one in three UK workers admit to not having a private or company pension.
The survey found out that of those who do pay into a private pension, the average investment is 6.2 per cent of their annual salary.
Women are far less likely to save for a pension than men. 41 per cent of women don’t save for a pension, whereas 29 per cent of men are not putting money into a private or company pension scheme.
By not paying into a scheme workers are missing out on an average of £15,000 in tax relief during their working lives. The Office for National Statistics (ONS) says that the average UK employee earns nearly £1 million in the course of their working lives and by saving 6.2 per cent of this income, they would be expected to receive a total of £15,000 in tax relief.
The amount of tax relief lost is proportionately higher for employees who earn amounts that take them into the higher tax bracket.
Vince Smith-Hughes, head of business development at Prudential, said: "Failing to save into a pension means not only having to rely solely on the State Pension in retirement, but also missing out on the ‘free money boosts' which come with pensions, such as tax relief and employer contributions.
"Making regular pension contributions is a vital part of securing a comfortable retirement. Although saving for retirement may not be a priority for young people, the more money which is stashed away from an early age, the more likely that significant rewards will be reaped later in life.
Use the Myfinances.co.uk comparison tables to find a better deal on a pension or annuity.
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