Pension dreams far from reality, study shows

Fri, 15 Sep 2006

Most UK residents plan to have a more comfortable income after reaching retirement than is realistic, according to new research.

Some 11 out of 12 British adults are not on track to hit their pension savings targets, the Scottish Widows study shows.

The average UK adult plans to retire on £29,479 per year, 75 per cent above the average of £16,172.

Furthermore, 26 per cent of adults will have no pension provision whatsoever, the study found.

Ian Naismith, head of pensions market development at Scottish Widows, says: "The truth of the matter is quite simple – if you want to have a fairly comfortable retirement you should be saving at least 12 per cent of your earnings year in, year out from the age of 30 until retirement at 65.

He adds that achieving the income which most are looking for would require even larger savings.

"As a nation we are not saving nearly enough – yet we still hope we will be comfortable in retirement," the expert added.

The Association of British Insurers has launched a campaign, called Save More Now, designed to highlight the importance of early savings in creating an adequate pension income.


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