Only 40% saving for retirement: Axa Wealth
Recession-weary consumers are cutting back on their retirement savings and the wealthier segments of the population are struggling to save, research by Axa Wealth has found.
The findings in the 20-page half-year Big Money Index report showed 68 per cent of wealthy people had stopped making contributions to investments in the second quarter of 2012, and one-third were less inclined to lock money away because “nothing seems safe anymore”.
Andy Zanelli, head of retirement planning for Axa, said: “The current attitude to saving is unsustainable if we are serious about protecting our ageing population in years to come.
“Rising longevity means that, for many, retirement is likely to be longer than ever before so planning ahead and taking control of their financial future as early as possible is vital if consumers want to be able to meet their ambitions in later life.”
Across the population the survey found 40 per cent of consumers were not saving for retirement and 20 per cent were not saving at all, representing a 6 per cent increase on the previous study carried out in December 2011.
Among those respondents without a financial buffer, 59 per cent were not contributing to a pension and 27 per cent had stopped saving at all.
Other findings pointed to a continued decline in pension ownership. Savings into company pensions and personal pensions fell by 2 per cent, while savings into Sipps and pension annuities fell by 1 per cent.
Almost 20 per cent of those surveyed said they were relying on downsizing their homes to fund retirement.
Figures from the Office of National Statistics earlier this year showed contributions into pensions during the 2010-2011 tax year were slightly down on the previous year and, for the first time in a decade, more people paid into an Isa than a pension.
Mr Zanelli said: “It is alarming to see how many consumers are failing to invest in their future in favour of surviving the present.”
Paul Richardson, managing director for Surrey-based Concept Financial Planning, questioned the findings and voiced scepticism on statistics which he said “can be made to look however you want them to”.
He added: “I am finding clients across the board are putting more money into their pensions.
“I had a client come in last week who was in his 20s and said he needed to put more money into his pension. My experience is people are more concerned about having enough money to live on when they retire and want to do something about it. If that means a financial sacrifice today, so be it.”
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