Third of people do not have a pension

Third of people do not have a pension

About a third of people do not have a pension, according to research from personal finance comparison website Finder.

A survey published by the aggregator last week (18 October) found 35 per cent of Brits claimed they did not have a pension, while 36 per cent did not know how much was in their pot.

Almost half (48 per cent) of people aged 54 to 74 said they didn’t know how much in savings they needed for their retirement. About one in five thought they needed a maximum of £50,000.  

According to Finder, 23 per cent of 39 to 53-year-olds were falling short by more than half of the recommended pension amount of £445,000, while millennials were short by about £395,000.

Jon Ostler, CEO at Finder, said: "It’s concerning to learn that so many baby boomers are still yet to consider the cost of a comfortable retirement.

"Despite the introduction of the automatic enrolment workplace pension a few years ago, over a third of those surveyed in our study said they still don’t have a pension.

"For those who do, 36 percent are unaware of how much they currently have in their pot, and a whopping 43 percent of Brits admit they don’t know how much they need to save for a pension.

"Employers must legally provide a workplace pension in the UK so it’s important that employees in the UK are aware of what they’re eligible for, as well as looking into a private pension to top up their pot."

Data published recently by True Potential Investor showed employed people aged 55 expected an average annual retirement income of £15,890, which was 31 per cent below what was needed for a comfortable retirement.  

The study involved more than 38,000 UK savers and found 22 per cent aged 55+ were planning to work beyond their retirement and 42 per cent were unhappy with their current financial position.  

Nick Bamford, financial planner and founder of Informed Choice Financial Planning, said: "There can be many reasons why a person doesn’t have a pension pot. They may have decided that a pension pot isn’t worth it and been convinced by others that pensions are expensive, inflexible or even a rip-off.

"They may have been disillusioned by so many stories of scams that have taken place. Or perhaps they may believe that pensions are complex/boring and about old age rather than them now.

"Modern platforms allow 24/7 valuations so it could be that those who don’t know have not been shown how to find that figure out."

But he added: "Averages are dangerous things. What matters is how much the individual needs, not what the average amount is."