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How Britons save for retirement

Still reeling from the global economic turmoil of recent years, people of all ages have retirement on the brain. Is it still possible? What's the best way to ensure financially security in retirement? We explore how we're preparing for our golden years.

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POUNDS AND PENSIONS

HOW BRITONS SAVE FOR RETIREMENT

Still reeling from the global economic turmoil of the last few years, Britons of all ages have retirement on the brain. Is it still possible? What’s the best way to ensure it’s financially viable? We explore how Britons are preparing for their golden years.

 

RETIREMENT ON THE MIND

How Britons Plan to Get By

Most Britons plan to rely on pension — be them occupational, personal, or state pensions — during their retirement.

Largest Expected Source of Retirement Income
44%      Occupational or personal pension
26%      State pension
10%      Savings or investments
8%       Home equity
5%       Future inheritance
4%       Second property
5%       Other
* Due to rounding, figures exceed 100 per cent


Attitudes Towards Saving

Though the majority of Britons believe they’ll most rely on pensions during retirement, a slightly greater proportion believe property is the best way to save for their golden years.

>> 58% — Believe property is the best way to save for retirement

>> 52% — Believe a pension is the best way to save for retirement

>> 42% — Believe they know enough about pensions to make decisions

>> 38% — Prefer living today than saving for retirement

 

PREPARING FOR RETIREMENT TODAY

Who’s Saving for Retirement?

A majority of employed adults are contributing to a pension, but it’s only a slim majority.

45%      Not saving into a pension
55%      Saving into a pension

 

How Britons Are Using Pensions

Among those who do save for retirement in a pension, pensions through an employer are by far the most popular way of saving.

87%      Save using occupational pension only
10%      Save using personal pension only
4%       Save using personal and occupational pensions
* Due to rounding, figures exceed 100 per cent

 

Attitudes Towards Financial Risk

In a surprising contrast, most Britons identify themselves as averse to risk, but also very impatient when it comes to financial matters.

Most Britons are averse to risk—most would choose a guaranteed £1,000 over a one-in-five chance of receiving £10,000. But they’re also financially impatient—preferring £1,000 over £1,100 in one year.

>> 23% — Are risk tolerant
>> 76% — Are risk averse

>> 22% — Are financially patient
>> 77% — Are financially impatient

* Figures reflect per cent of respondents who agreed with each statement


BRITONS’ SAVINGS VERSUS DEBTS

 

Liquid Savings

More people prefer to build up their liquid assets (including saving accounts) before saving into a pension. However, most Britons have less than £2,500 in liquid assets.

Distribution of Liquid Savings

30%      No Liquid Savings
33%      £1 to £2,500
9%       £2,501 to £5,000
9%       £5K to £10K
8%       £10K to £20K
4%       £20K to £30K
7%       £30K+

 

Liquid Debt

Outstanding debts often stand in the way of saving for retirement. Luckily, a majority of Britons report they have no liquid debt.

Distribution of Liquid Debt

51%      No liquid debt
3%       £1 to £100
8%       £100 to £500
6%       £500 to £1K
7%       £1K to £2K
10%      £2K to £5K
8%       £5K to £10K
8%       £10K+  

* Due to rounding, figures exceed 100 per cent. Liquid debt includes amount owed on credit cards, overdrafts, household bills, etc.

 

SOURCES: INSTITUTE FOR SOCIAL AND ECONOMIC RESEARCH, STRATEGIC SOCIETY CENTRE

 


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