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More than one in five ‘has no retirement savings’

More than a fifth of individuals have failed to put by any funds for their retirement, a new study has warned.

According to the research from Scottish Widows, 22% of individuals aged 30 or above who are earning a minimum of £10,000 a year have not put aside any money towards a pension.

The figure compares to 20% of individuals a year ago, suggesting that this is a rising trend.

In addition, the report warns that many people who are saving for retirement have unrealistic expectations regarding the income those savings will generate on retirement.

The news follows a recent report which suggests that almost 50% of employees over the age of 50 will need to work for an additional 11 years beyond the state pension age, in order to maintain a minimum acceptable standing of living on retirement.

October 2012 sees the introduction of the new system of automatic pension enrolment, which will see eligible employees aged between 22 and the state pension age, who earn at least £8,105 a year, being automatically enrolled into a pension scheme with employer contributions, unless they are already in a scheme that meets the minimum standards.

However, the changes are being phased in over a number of years, starting with larger employers, and will not be rolled out to all businesses until 2018.

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