Millions of Britons could find themselves coming under
financial pressure in later life, new research indicates.
In a study carried out by Baring Asset Management, it was
revealed that just less than a quarter (9.03 million) of
all adults are yet to begin to save for their pension. The
findings also showed that the typical 18 to 31-year-old
expects that they will be able to retire at the age of 61.
And a lack of an adequate pension pot may result in
consumers developing difficulties in meeting other demands
on their finances. Such areas could include personal loans,
credit cards and outstanding mortgage payments.
In addition, the study showed that 12.25 million (a third
of adults) expect that they will be able to stop working
between the ages of 60 and 65. An estimated 7.43 million
are looking to retire between 55 and 60, with some 4.83
million aiming to do so before they are 55. Research from
the firm also indicated that 16 per cent of Britons expect
that they will be working beyond 65. Just 371,385 people,
meanwhile, do not plan on stopping work until they are at
least 75 years of age.
It was also put forward that "an incredible" 46 per cent of
people looking to retire before they are 50 years old do
not even have a pension scheme. In addition, about one in
five (21 per cent) of people on a defined-contribution (DC)
pension plan expect that they will be able to retire before
the age of 50, with this proportion dropping to 17 per cent
for those people on a defined-benefit (DB) final
salary-related scheme.
Commenting on the study, Rob Lay, head of European sales
for Baring Asset Management, said: "People have to start
taking a more proactive approach to planning for their
retirement. Relying on a DB scheme is no longer an option
for many UK adults and relying on your property as a
pension is a very risky strategy to take. These figures
reveal a worrying trend of UK adults assuming that they
will be in a position to retire without having made the
necessary arrangements for funding that retirement.
"People are increasingly expected to live longer, which is
a major issue facing our society. At the same time, the way
adults plan for retirement is changing - we can't rely on
DC schemes or a state pension any longer."
He added that it is "absolutely vital" that Britons take
the time to think about how they are to build up their
pension fund as soon as possible. Mr Lay claimed that if
this is not done people may find that their target age to
retire slips "further and further away".
Those worried about their capacity to put enough money away
for a pension fund might wish to consider getting a cheap
loan. Although this may present another financial demand
for borrowers, the loan could allow people to meet a number
of requirements on their spending quickly so giving them
the chance to free up more cash to put into pension funds.
And doing so might prove to be of particular help as
consumers get older, as a recent Wilkins Kennedy study
showed that the number of retired people filing for
bankruptcy has more than doubled during the last five years
as they become unable to meet demands for payment on the
likes of utility bills, loans and credit cards.
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Abbi Rouse writes for All About Loans. Our visitors can
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