A fifth of Brits making no provisions for pensions

Around 20 per cent of Brits are failing to save any money to put into their pension fund, according to a new report from Scottish Widows.

The seventh annual Pensions report by the firm polled consumers between 30 and retirement age who earn over £10,000 a year.

It was also found that 49 per cent of Brits who could and should be saving for their pensions are failing to do so to an adequate degree.

This is despite the fact that 73 per cent of people recognise the importance of taking personal responsibility for their pension provisions.

It was also found that the majority of people would like around £24,300 a year in retirement in order to live comfortably.

In order to achieve this amount, Brits need to save an extra £58 a month than they already do to help them reach a reasonable amount of funds for later life.

Ian Naismith, head of pensions market development at Scottish Widows, said: "This year's report clearly illustrates the stark difficulty we face in helping people to recognise the urgent need to take personal responsibility for their future.

"We need a step-change to overcome this ingrained inertia and help people prepare for their retirement."

Those already of retirement age that may not have as much money as they had planned could consider equity release.

Anyone over the age of 55 who owns their home can take advantage of equity release, which frees the cash tied up in the property.

Advantages of equity release include:

• A cash lump sum, which is tax-free, is released from the equity built up in a property.
• The homeowner can remain in their property for life.
• The money can be used to pay off debts or help create an income for life.

However, there are some risks involved with equity release including:

• Some schemes may make it hard for a person to move house.
• There may be an impact on the benefits that a person obtains.
• Depending on the type of equity release, there may be a risk of repossession.

For more information consumers can visit a price comparison site, such as MoneyExpert.com.

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