Prudential are warning that retirement savings are likely to fall in the future. They have attributed the decline to the reduction of final salary occupation pensions; the higher amount of debt among younger generations and the increase in people aged 50 to 65 using equity release.
It is believed that the retirement saving situations is likely to get worse and pensioners’ incomes in ten years time will be a big issue.
Our view
The key to improve the saving for retirement situation is education, although at the bottom end of the market, advice is generally not available and the British people do not like to save. In addition, pension retirement options needs to be improved.
The fact that you can only purchase an annuity or draw down an unsecured income that if you then do not purchase an annuity goes to charity or the tax man on death. What a great incentive to save that is!
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