28-06-2006 16:37
The number of people saving adequately for retirement has fallen drastically, over the past 12 months, according to new research from Scottish Widows.
The Scottish Widows pension report, launched in 2005 tracks the percentage of people who are not saving enough towards their retirement, using two measures: the Scottish Widows Pensions Index and the Scottish Widows Average Savings Ratio, both of which have fallen significantly since 2005.
The pension index, which tracks the percentage of the population saving adequately for retirement, has fallen from 55% in 2005 to 46% in 2006. The savings ratio, which tracks the percentage of income being saved for retirement by UK workers who cannot rely on a final-salary pension, has dropped from 7.9% to 5.8%. Scottish Widows' recommended target savings ratio is 12% of earnings.
"The deterioration in the index and the ratio is very disappointing when you consider how high profile pensions have been in the last 12 months," says Ian Naismith, head of pensions market development at Scottish Widows.
"In fact, our figures show that four in every five people who aren't relying on a final salary pension are failing to save adequately for their retirement, and that two in five are saving nothing at all. With this level of under-saving, no-one can be in any doubt about the challenge facing us all when it comes to preparing for retirement."
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