Pension adviser engagement is still too low according to the latest figures from the Department of Work and Pensions (DWP) which continue to paint a bleak picture for millions moving towards retirement.
According to the survey of over 2,500 people:
- A quarter of people aged between 40 and 75 did not have a private pension.
- A further 16% had not started making any savings for retirement – including some of those questioned who were aged over 70!
- 15% of people aged between 65 and 70 are still in full time employment.
- And 5% of those over 70. Presumably those who hadn’t made any pension adviser engagement provisions for retirement.
- Over half of those without any pension provision said it was because they couldn’t afford to make any contributions.
- Over 60% of those questioned who were under 65 said they intended to keep working beyond the state retirement age.
- Almost half of people said that they didn’t expect their pensions to be their main source of income after retirement.
- 25% of those who hadn’t already retired said that they would look at equity release options to support their income. This is borne out by the latest figures from Aviva which said that equity release drawdown was now £140 million, up from £16 million the year before. Nearly a tenfold increase.
- 22% said that they expected to use funds from an inheritance.
- 35% of the self employed said that they had no pension provisions.
Single mothers are particularly hard done by. On average single mothers have only £29,000 in their pensions compared to an average of £275,000 for married couples. There are 1.7 million single mothers in the UK. 40% have no pensions at all.
The survey also looked at those who had cashed in on their pensions since the introduction of freedoms in 2015. Over 90% of those who’d taken a lump sum said they were happy. Plus, two thirds of those who had transferred their pensions.
The figures are also reflected in the latest survey from Aviva.
That showed that under 35’s were the most concerned about their financial futures. With over 65’s being the least concerned.
Aviva followed up the survey with their own tips on how top plan for a “happy” retirement. Some of these tips included:
- Starting pension contributions at least 40 years before retirement.
- Paying contributions of at least 12.5% of your salary into a pension.
- Try to build up a pension pots that is a least ten times your salary.
- Make sure you search for any lost pensions.
- Keep checking to see if you are on track.
- Arrange a pension adviser engagement early on.
All good suggestions that we would agree with.