Nine in 10 people in Britain believe the government is unable to provide retirement pensions for the future, according to new polling.
The UK has one of the lowest private pension levels in Europe, and the UK Pensions Policy Institute (UKPPI) said it will take an additional $19 billion a year in pension contribution from 2020 to enable workers to put aside the same amount for retirement.
Voters also agreed that they were worried about the system as 70 percent of people thought employers would not offer as attractive a pension as private pensions and 85 percent thought the system was complicated.
One in four (24 percent) said they did not know how much they had saved for a pension so far and this was similar for people under 55 years old.
“The lack of clarity in the public’s pension outlook is not simply a symptom of financial illiteracy or overly optimistic expectations,” said David Certner, UKPPI’s chief executive.
“Public trust in the UK’s pensions system is lower now than it has been at any time since the 1950s and this needs to change. People cannot allow the words ‘privatized pension scheme’ to be eclipsed by ‘State Pension’, or any other pension scheme, for that matter.”
But despite uncertainty over future levels of pension, people, on average, reckon their current pension is good and continue to build up their pots.
Overall, 71 percent of people who are not yet in retirement said they are happy with their pension, while 72 percent of people aged 55 or over who are currently in retirement said they are happy with theirs.
Around the world, Germany has the highest percentage of people who feel comfortable with their pension savings (96 percent) and the US is the least secure on average (40 percent).
According to a study of more than 7,000 people from across 34 countries, 34 percent of people aged 55 to 64 and 33 percent of people aged 65 and over said they were willing to do without an active retirement and reduce their standard of living until they were no longer able to.
Kim Bui-Jai, a global retirement expert at Zurich Financial Services, said: “Retirement insecurity exists regardless of how much you’ve saved in a pension. Age discrimination is alive and well in the workforce. Fearful of retirement can be a trigger for them to either keep working past the age they originally planned, or save less and have less money when they do retire.”
The research, released to coincide with National Pension Month in the US, also found confidence in the system in many countries is especially low and people are making “substantial sacrifices” to save for retirement.
Half of the people polled in the US said they were willing to reduce their income for a year to make a pension contribution. In the UK, 44 percent said they would have to do the same and in Germany the figure was 33 percent.
“Older workers can be responsible savers but are often under pressure from their employers to start working again,” said Bui-Jai. “There may also be changes in income or benefits through retirement that can reduce the amount of savings they can afford.”
The poll, conducted by YouGov, also found that 40 percent of people do not regularly calculate how much they are saving for a pension.
The facts and figures, as he sees them:
* 25 percent of people in the UK started saving for a pension when they were in their 20s.
* Two thirds of those in their 30s and over still get a financial education from their company.
* Only 46 percent of UK workers receive any financial education from their employer.
* Fifty percent of the 15-64 age group said they never try to budget their pension and 54 percent never calculate how much pension they have saved.
* Only 55 percent of people who worked for 15 years or more in the UK in 2017 surveyed said they are confident in the level of their pension provision.
* Only one third of women in the UK have a plan in place for the kind of pension they will retire on.
* Nine in 10 British people know nothing about simple pension calculator.
* Three out of 10 do not have any idea about how much they have saved for a pension.
* One in four people do not know how much they have saved at all.
* One third would prefer to spend their money now and have nothing left at retirement.
* One in three think that a drawdown pension option will not pay out as promised.
* More than a third of people are confident they will be able to live comfortably in retirement.
* Sixty-one percent of people in the UK feel insecure about their retirement.