Less than half of respondents are saving enough for retirement

Only 46% of UK employees are saving enough for retirement, down five percentage points since 2011 and a fall of eight percentage points since 2009, according to research by Scottish Widows.

The Scottish Widows Pension report 2012 surveyed 5,200 UK employees. It has been published annually since 2005.

The report found that over a fifth (22%) of respondents are failing to save anything at all for their retirement, which is an increase of two percentage points on 2011.

Three-quarters (73%) of respondents named other financial commitments as priorities above paying into a pension. Paying off debts wass a bigger priority for 30%, while 40% of respondents cited general living expenses. For 16%, holidays and travelling came before retirement provision.

In the north east of England, less than a third (32%) of respondents are saving enough. The only regions with more than half saving adequately are Scotland (56%) and Yorkshire and the Humber (54%).

As many as 41% of respondents would like to retire by their 60th birthday. The average age at which people would like to retire remains 61 or 62. Only 9% want to work until they are 70. This has remained consistent from 2008 to 2012.

Ian Naismith, head of pensions market development at Scottish Widows, said: “These are alarming findings as UK pension provision has hit an all-time low.

“People are saving less for old age, yet their expectations remain high as the majority fail to recognise the harsh reality of retirement.

“With an aging population, and ongoing economic difficulties, it has never been clearer that we need to do more to shift people quickly from their unrealistic expectations of retirement.

“They must either increase their savings substantially or change their expectations of when they might retire and how much income they will receive.

“Auto-enrolment presents a once-in-a-lifetime opportunity to reverse these trends. But for this to be successful, we need a compelling government communications campaign to make clear in simple and understandable terms the need to save for retirement.”

Read more articles on saving for retirement