Pensions  

Britons' early retirement hopes dashed

Britons' early retirement hopes dashed
Mounting economic woes put pressure on personal savings (Monstera via Pexels)

More than 50 per cent of Britons are failing to put any extra money into a pension pot, while 70 per cent cannot see themselves being able to take early retirement.

According to research carried out by tax refund specialist Rift Tax Refunds, only 29 per cent of people are able to save enough towards their goal of taking an early retirement.

In a FindOutNow survey of 1,060 UK people, commissioned by ProperPR on behalf of Rift, half of all UK adults are "failing to plan for the future".

Of the 50 per cent who are paying into a pension, more than half said this was via a workplace pension scheme, although most people said they were "not aware" of how much they actually contribute each month.

Some 53 per cent also admitted to being in the dark about how much their employer contributes. 

Of those 29 per cent who are heading towards that goal of retiring before 60, only 9 per cent said they were also paying into an additional pension scheme, although most were saving additional money to fund their retirement. 

Survey results:

Do you pay into a pension pot?
 AnswerRespondents
 Yes50%
 No50%
   
 Is this automatically done via a workplace pension?
 AnswerRespondents
 Yes52%
 No48%
   
 Are you aware how much you pay each month?
 AnswerRespondents
 Yes53%
 No47%
   
 Are you aware how much your employer contributes each month?
 AnswerRespondents
 Yes47%
 No53%
   
 Do you pay in to any additional pension schemes?
 AnswerRespondents
 Yes9%
 No91%

According to Rift's chief executive, Bradley Post, the fact that so many people are relying solely on their workplace pension to fund their life after work was "striking".

This is especially so when you consider that, according to The World Economic Forum, the average person is expected to outlive their pension pot by 10 years, meaning most people are at risk of running out of money during their pensionable years.

He listed seven reasons why clients should save more: 

1 - Live life to the max in retirement.

2 - Time flies so save as much as you can, as soon as you can.

3 - Retire sooner by saving more.

4 - Saved money can make more money by investing carefully.

5 - Good habits last a lifetime. Early saving habits can help serve with wise spending decisions in retirement.

6 - Saving into a pension scheme comes with tax advantages.

7 - Good saving habits help people avoid getting into debt. get into avoidable debt.

Post added: “Such is the state of the world today that saving for an early retirement feels impossible at worst and a luxury at best.

"But the sad truth is that workplace and state pensions are rarely enough to fund a good quality of life after decades of hard work and so saving for an early retirement is key, even if it means you can’t retire early, but have enough in the bank when you do."

simoney.kyriakou@ft.com