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Retirement saving hits high but savers expecting more


Retirement saving in the UK has hit its highest ever level, with 56% of people now saving an adequate amount.

A report from Scottish Widows showed that people are saving outside their pension on average £142 towards their retirement, which is an 8% increase from last year. The average proportion of earnings being save each month has now hit 12%, compared to only 6% in 2006, and 9% in 2013.

Almost 20% of people expect to save more in the upcoming years, and 40% feel positive about their long term financial situation.

The report also showed that there has been no improvement in the number of non-savers since 2009, as it still stands at a worrying 20%. This means that around 6.2 million people are not saving any money at all for retirement. The number of people without any savings or investments has actually risen, from 17% last year to 19% this year.

The largest number of none savers came from self employed people, with 39% of them not saving at all. This was followed by people working for small businesses, where 30% of people have saved nothing at all.

43% of people with wages under £10,000 are failing to save anything for retirement, compared to 24% of those earning up to £30,000 and just 9% of those earning more than £30,000 a year.

The study also highlighted the expected outcomes of peoples savings compared to the reality. On average, savers between the ages of 30-65 believe they would live comfortably on £23,469, but people saving at the current average level can expect an annual income of £15,600 in retirement – an annual shortfall of over £7,800.

Ian Naismith, retirement expert at Scottish Widows, said:
“Our research shows that confusion remains around how actions today translate into money tomorrow, with many people retaining unrealistic expectations about what their income in retirement might be. Both the industry and the Government need to continue working together to help people understand the living standard their savings might produce in real and tangible terms. Having a plan in place, starting to save earlier and putting aside more for later life will mean people will be better prepared to close the retirement aspiration gap.”

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