More Brits facing pension poverty
THE NUMBER of people saving too little for an 'adequate' income in retirement has leapt from 2m to 4.8m in the past year, according to a new report.
The State of the Nation's Savings 2004, published by the Association of British Insurers, also found that only 5% of people are 'very confident' they will have enough to live on in retirement, down from 6% a year ago.
However, the number of people failing to save for retirement fell from 8m to 7.4m.
The ABI was hopeful that Britons are waking up to the pensions crisis. It stressed that only one in four people supported a higher basic State pension for everyone compared with one in three a year ago, while the proportion accepting that the main responsibility for providing for their own retirement rose from 35% to 42%.
The number of people accepting they will have to work longer rose from 35% to 37%.
'These findings will confound those who argue that the public does not accept the severity of the pensions challenge or is unwilling to face the consequences,' said Joanne Segars, head of pensions at the ABI.
The research was published by the ABI to coincide with its Saver Summit being held in London today.
The association will publish detailed policy proposals to respond to the challenge for new thinking set out in the recent Pensions Commission's report by Adair Turner.
The association wants to see State pension reform which would address the disincentives to save created by means testing. It wants to increase the state second pension for workers who earned less than £15,000 a year, and match private pension savings, up to a threshold.
Action to encourage greater pension contributions from employers through a new Pension Contribution Tax Credit and greater provision of financial advice through the workplace, are also recommendations of the report.
The tax credit would reward employers who got a certain proportion of their workforce into a pension scheme and then also made a certain level of contribution towards their employees' pensions.
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