We’re not saving enough, but don’t just take it from me…
February 3, 2015
By Jessica Cook
Working in financial services requires the need to keep up to speed with the ever changing financial landscape and the many changes that come into play regarding legislation. And, so in my quest to remain informed, and whilst studying for yet another exam, I came across an array of shocking statistics that reminded me of why I do the job that I do.
Often when I meet people for the first time and we discuss financial goals and objectives they can be disillusioned as to how important financial planning is, how important retirement planning is, and most of all why we need to be saving.
I have come across a lot of statistics over the years demonstrating the fact the population isn’t saving enough. I will often mention these to my clients, but sometimes I feel they fall on deaf ears. They are brushed off and swept conveniently under the carpet.
My head in the books the other day I came across another plethora of shocking statistics that have been put to print. I want to share these with you. I have not made them up. I have not heard them in passing. These are real statistics that really brought home to me, once again, the absolute need for effective financial planning and the stark truth that each and everyone of us isn’t saving enough!
According to Scottish Widows – 22% of people are not saving for retirement and 54% are failing to save enough.Scottish Widows also discovered that the average retirement income that people would like to receive per annum is GBP 25,400 per annum, but the average saver is set to only receive GBP 13,000 per annum- at age 65.The Office for National Statistics revealed in a survey in March 2013 that a man aged 65 would currently need a fund of GBP 152,800 to purchase an annuity of GBP 5,000 per annum.
Life expectancy at birth is currently 78.8 years for a boy and 82.8 years for a girl – for a woman retiring at 65 that is 17.8 years they will need to fund from their savings.There are on going reviews of the state pension age. Under the Pensions Act 2014 the State pension age will increase to 67 between 2026 and 2028. It is likely to keep rising.
In the same survey by Scottish Widows they concluded that most people would like to have retired by their early 60’s but due to the size of the shortfall many people will be required to work into their early 70’s.The Department of Work and Pensions has estimated 11 million of today’s working age population face inadequate incomes in retirement.
Millions face an impoverished old age because they are putting away a fraction of what they need for a comfortable retirement. So please don’t just take it from me and acknowledge the importance of saving enough for yours and your families future.
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