Are you saving into a pension?

Many Brits could be storing up financial problems by failing to plan for their retirement.

According to new government data, almost half (45%) of working age adults are saving nothing at all into a pension.

This includes:

• only a quarter of low earners in the private sector
• a quarter of those from a Pakistani or Bangladeshi background
• over three million self-employed people

This is despite the success of auto-enrolment, which has led to 88% of eligible employees saving for the future - up from 55% in 2012.

Ministers believe that if current trends continue, the incomes of retirees will fall over the next few decades.

Official estimates suggest that:

• nearly 15 million aren’t saving enough for retirement
• retirees in 2050 will have £800 less private pension income than people retiring today

Another issue is that there’s a big disparity between how much men and women are saving for the future.

The government believes there is a 48% gender pensions gap in private pension wealth between women and men. 

Figures suggest that women close to retirement can expect to get over £5,000 less from their private pension than men. 

The government has revived the Pensions Commission to explore what’s stopping people from planning for later life.

“If we carry on as we are, tomorrow’s retirees risk being poorer than today’s,” said pensions minister Torsten Bell.

“So we are reviving the Pensions Commission to finish the job and give today’s workers secure retirements to look forward to.”

Work and pensions secretary Liz Kendall added: “People deserve to know that they will have a decent income in retirement - with all the security, dignity and freedom that brings.

“But the truth is, that is not the reality facing many people, especially if you’re low paid, or self-employed.”