More frightening statistics about pension savings – or rather, the lack of them – make for unsettling reading this Halloween, writes Pensions Expert editor Nick Reeve.
Based as I am in a small Scottish village, it’s unlikely I’ll encounter many trick-or-treaters tonight.
(Those that do venture to our doorway may well end up with an ‘I love pensions’ sticker, courtesy of the nice people at Aegon who gave me a whole sheet of them at the Pensions UK Annual Conference earlier this month.)
Regardless of how spooky our evening may be, there are plenty of frightening statistics piling up in my inbox to send a shiver down many a spine.
Earlier this week, Scottish Widows published research that showed around 20% of full-time employees were destined for poverty in later life due to not saving enough for retirement, while those in part-time work and falling under the auto-enrolment earnings threshold are set to fare even worse.
This isn’t a problem unique to the UK, either, as separate research from Fidelity found that around 40% of respondents to a global survey expected their savings to run out well before they die.
These reports are typical of the kind of research that I am sent on a weekly basis. Survey after survey and poll after poll all show the same thing: people aren’t saving enough – and don’t fully grasp what this means.
Standard Life is the latest to add to this terrifying tale, as it warned this week that 10% of people feel too overwhelmed to even look at their pension, and around a quarter have no idea how much they have saved.
With the Pensions Commission now exploring issues around adequacy and inequalities in the UK’s pension system, it could be tempting to wait until the spring and the commission’s interim report before taking any action. This temptation is only exacerbated by fears around the next Budget and what changes may be brought in by chancellor Rachel Reeves.
But, as anyone who has braved a good Halloween movie can attest, the heroes are usually the ones who face down the demons, ghouls, and monsters rather than running away. Whether it’s encouraging pension scheme members to increase contributions, helping employers top up payments, or exploring new ways to improve communications and support, there are many tools the pensions industry can use to “exorcise the pension demons”, as Standard Life puts it.
Nick Reeve is editor of Pensions Expert.
This editorial initially appeared in Pensions Expert’s Friday Takeaway email, summarising the biggest news of the week and the latest appointments. To sign up, please register for free.
