Workers Have No Idea How Much To Save For Retirement

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Written By Mahmoud Sarvari

Retirement on the poverty line is a real risk for one in five working adults who have no pension savings.

And even if they were saving, 80% have no idea how much to put aside from their wages for when they give up working.

The remaining 20% who are saving reckon a pot of just £275,000 will let them live comfortably through their twilight years, although that much will pay just £8,250 a year or £687 a month at current rates.

To show how out of touch most people are with pensions, most plan to retire and pick up the state pension at 65 years old. However, the state retirement age is 66 and is likely to rise to at least 70 for some of today’s youngest workers.

Clueless about pensions

They also believe the state pension pays around £15,000 a year, when the current figure is £8,300 a year for someone qualifying for the maximum payment.

“For many of us, old age is a mere blip in the distant future but for many more, retirement is ready to pounce,” said a spokesman for Printerland, the firm that carried out the survey.

“But could you honestly say, you would be happy with your pension pot if you carried on saving as you are now?

“It also seems we are clueless when it comes to state pensions, while few of us are in the know about pensions in general, as a quarter of Brits have no idea what they contribute to their pot each month, while the same number couldn’t say what they have saved so far.”

No one listening

British workers are not the only ones confused by pensions. A similar survey in the US revealed workers there are just as baffled about money.

The 2016 Retirement Confidence Survey found about a quarter of Americans have less than $1,000 saved for retirement, while two-thirds have savings of less than $50,000.

Surveys like this show that despite millions spent on publicity urging people to save for retirement, no one seems to be listening because they probably believe retirement is too far off for them to worry too much and they still have debts and families taking priority over putting money into a pension.