Low UK pension savings exposed by report

28/07/2009

New data has shown that 72 per cent of people have not set up a pension to provide them with extra income in retirement.

According to the report, released by research firm Datamonitor, most Brits will be forced to rely on the state pension alone when they stop working - and might slip into poverty as a result.

The firm also suggested that falling house prices might make this situation even worse in future.

UK residential property has dropped in value by around 15 per cent in the last year due to the credit crunch.

Annabel Gorringe, life and pensions lead analyst with Datamonitor, said: "Consumers have historically relied on their property as their pension ... the difficulties of saving for retirement seem to have been woefully underestimated by both policymakers and individuals themselves."

Kevin Still, EuroDebt director, commented: "These figures would suggest that most people qualifying to draw their pension will need to keep working to avoid being in a situation of poverty. There is a significant risk that many credit users will have taken out mortgages and lengthy unsecured credit agreements when they were working, but had not planned on how they were going to fund these payments in later life."

He added: "EuroDebt's own research suggests that the average amount of unsecured credit for over-55s is over £24,000, many still having mortgages to pay. Older debtors can often be more vulnerable to aggressive debt recovery tactics, where there is a desire to pay all those demanding payment without necessarily the funds to do this or a clear understanding of who to pay first.

"Taking professional financial advice and debt advice can be important at an early stage."

Tags; Income Worries and Debt, Retirement Money Problems,

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