Pensions savings have been hit by the recession

Pensions savings have been hit by the recession with more people saving less, according to figures from Scottish Widows.

The Scottish Widows pensions index, which measures the proportion of people saving enough for their retirement, stands at 48% this year, down 6% since last year – the lowest since 2006.

Overall, 41% of pension scheme members have saved less because of the economic downturn. Women over 50 have been affected the most – 52% of this group made adequate savings in 2009 compared to 38% in 2010.

Just 43% of women overall are saving adequately compared to 47% last year, while 52% of men are saving adequately this year compared to 59% in 2009.

Reliance on defined benefit (DB) schemes has dropped, and 70% of members in DB schemes believe it will provide their main income in retirement, compared to 78% last year.

Ian Naismith, head of pensions market development at Scottish Widows, said: “The last two years have been tough on the economy, and we are finally seeing the effects trickling through to pensions savings. The previous three years saw a steady rise in the number of people saving adequately for retirement, but now we are seeing the full impact of the downturn on people’s retirement pots.

“While there are signs the economy is recovering, the nation’s saving habits paint a very different story. There is still a great deal that needs to be done from both the government and the industry to better encourage pensions savings for the long term, particularly in the current economic environment. With 21% of those that should be saving putting aside nothing at all there is still a big challenge ahead.”

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