More than two fifths (41%) of UK employee respondents stopped or reduced their retirement savings during the economic downturn, according to research by HSBC.
The bank’s survey of more than 16,000 people globally found that despite signs of recovery, retirement saving has been, and continues to be, significantly impacted by the global economic downturn, with employees stopping or reducing savings for retirement in cash deposits (31%), investments (25%) or personal pension schemes (25%).
Some 59% of UK respondents are concerned that they will not have enough income to live on in retirement, and 10% believe they will never be able to fully retire.
Mortgage repayments in particular are preventing respondents from adequately preparing for a comfortable retirement, with nearly a third (30%) seeing them as a barrier.
A similar amount (31%) of respondents cited paying off debt as a barrier to preparing adequately for retirement.
The research found that almost two in five (37%) UK respondents are not currently, or do not intend to start, saving for retirement.
Almost a third (31%) of respondents aged 45 and over and nearing retirement are not saving, or do not intend to save.
The research also found:
- 39% are not confident in their ability to maintain a comfortable living standard once they retire.
- 40% expect their standard of living to fall.
- 80% of retired respondents have confidence in workplace pension schemes as a good way to generate income for retirement.
- 61% believe a second home or buy-to-let properties is also a good way to generate income for retirement.
Caroline Connellan, head of UK wealth at HSBC, said: “Our research shows that the financial hangover from the economic downturn is impacting what many are saving for retirement.
“Today’s employees have greater responsibility to think carefully about how much they’ll need for a comfortable retirement.
“This can sometimes involve quite complex decisions on the various savings and investment options and most people will benefit from financial advice.
“The 2014 Budget changes, which create greater freedom and choice on pensions from April 2015, have resulted in more interest from our customers to review their retirement plans.
“If there’s one action we should all consider, it is to start saving as early as possible [because] even the smallest amounts saved now can make the likelihood of a comfortable retirement all the more real.”