Blog: Is Retirement an Option?

Posted in: News on July 15, 2013

I recently came across the Scottish Widows Annual Pension Report for 2013 and it makes scary reading. The key findings are that 55% are not saving adequately for retirement and 1 in 5 of the UK population of working age are not saving anything! The conclusion reached is that “an underprepared population are entering old age with an increasing number of credit commitments”.Other research supports this, with almost half of working age people saying that they are relying on inheritances or the equity their property to fund retirement, however with a static housing market and people living to increasingly older ages- many using equity release themselves- for many this will not be early enough or create enough income.The latest government solution to this is auto enrolment into pension schemes. By 2018 all employers will have to automatically enrol their employees aged between 22 and state retirement age into a pension scheme. The employer will contribute 3% of salary and the employee 4%. The idea is to encourage greater savings, but in the current economic climate, with pay freezes and cuts the norm, for many, it is difficult to see where the extra money can come from to make these contributions.On top of all this today’s middle aged face rising state retirement ages, which together with poor investment and savings returns, will force many to continue in employment way beyond the age where they had planned to retire. Even this will not help many live the lifestyle that they dreamed of in older age. Very few older people who continue in either full or part time employment maintain their peak salary levels, meaning that compromises still need to be made, even before retirement is reached. Our parents’ generation may have been able to retire early and travel the world, but for many of today’s working population retirement is a far more distant dream than they ever imagined and when it does arrive it is unlikely that many will be able to continue to live the lifestyle that they are accustomed to.Lisa HealingsFinance & Business Operations Manager

Beth Johnson Foundation Blog

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