Half of Britons admit they are failing to put enough money aside for retirement

Half of Britons are failing to save enough towards their retirement, with more than a third of people worried about how they will cope when they give up work.

New research shows that only 51% of people are setting aside enough money to provide an adequate income during retirement, according to life insurer Scottish Widows.

But one in five people admitted they are not currently saving anything towards their retirement, while 14% are seriously under-saving and 17% are not saving adequately.

Piggy bank

Half of Britons admit they are failing to save sufficiently for retirement

Those who are paying enough into a pension are most likely to be male, working in the public sector, earning between £30,000 and £50,000 and aged over 50.

By contrast, women are far more likely to be failing to make any pension provision than men, as are people with children under five, the self-employed and those with debt.

The research, which monitors the retirement provision of people aged 30 and over earning at least £10,000 a year, found that there had been a slight increase in the number of people making adequate retirement provision, with the figure up 2% from last year, but it said this was likely to have been caused by short-term savings.

It found that UK workers who were not expecting to get their main pension income from a defined benefit scheme, were setting aside an average of 8.7% of their pay towards retirement, up from 7.9% in 2007 and the highest figure since the research started in 2005.

But the group said much of this rise was caused by an increase in money being paid into savings vehicles other than pensions, such as savings accounts, and the gain was largely being cancelled out by people subsequently withdrawing this cash.

Ian Naismith, head of pensions market development at Scottish Widows, said: 'While pensions savings are slowly starting to rise, there is still the real worry that in the current economic environment the nation is not doing enough to prepare for retirement.'

Four out of 10 people said they felt better off five years ago than they do now, with 32% worried about their short-term financial situation and 29% pessimistic about their finances in the long-term.

A third of people also said they could not afford to increase their current savings levels, rising to 60% among non-savers.

Around 44% of people without a pension said they did not think they would ever be able to contribute to one, while 37% of those questioned admitted they were worried about not having enough money during retirement, up from 34% last year.

Mervyn Kohler, special adviser for Help the Aged, said: 'Although there has been a slight increase, it's very worrying that so many adults aren't saving adequately for their retirement.

'With more and more pensioners living in poverty according to the latest Government statistics and more older people apparently working longer to avoid getting into financial difficulties, people need to be doing all they can to save for retirement.'

Mike O'Brien, Minister of State for Pensions, said: 'I welcome the news that pension saving is rising, and with Government reforms to introduce automatic enrolment with mandatory employer pension contributions, we can combat savings inertia further, ensuring millions of people get access to pensions for the first time.

'The message must be clear - people should save and save early. This will make all the difference to their retirement incomes. One pound saved at 20 could be worth up to 60% more at retirement, before tax, than £1 saved at 40; so the earlier people start saving the better.'

No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards.

We are no longer accepting comments on this article.

Who is this week's top commenter? Find out now