Strained by the rising cost of living, almost a fifth of UK workers in their fifties and sixties are unable to save anything for retirement, new research has revealed.
Insurance company Aviva in a report published on Thursday found that a total of 43 per cent of those aged 50 to 59, and 38 per cent of those aged 60 to 69, describe themselves as either “occasional” or “absent” savers, meaning that they save infrequently or on an ad-hoc basis, with no clear savings goal.
Two-thirds – or 64 per cent – of workers in their fifties admitted that they are yet to ramp up their saving habits in the run-up to retirement. And over half of people in their sixties – some of whom may even have passed the eligible state pension age – are yet to increase saving into their retirement fund, Aviva found.
But the research also revealed that the reason for not saving is not just a lack of disposable income. Millions of older workers are simply not aware of how much they will need to save for their retirement. Their saving habits, Aviva concluded, are “not being informed by the reality of their situation”.
“It is worrying to see so many of the UK’s older workers in the dark over how much they need to save to afford a comfortable retirement,” said Lindsey Rix, managing director for savings and retirement at Aviva.
“For many older workers supporting family members including children and parents, saving for retirement can all too easily take a back seat in terms of financial priorities,” she added.
Aviva calculated that around 42 per cent of older workers had not yet worked out how much money they would need in retirement.
A spike in inflation triggered by a fall in the value of the pound since last year’s Brexit vote has made saving trickier across a range of demographics. Compounding the problem, wage growth has lagged.
Data on Wednesday showed that weekly earnings across the UK grew at an annual rate of 2.5 per cent in the three months to October, up on last month’s figure but still significantly below the latest inflation reading of 3.1 per cent, which is near a six-year high.