Scots approaching retirement are feeling unprepared, according to new survey by Phoenix Group.
According to the retirement specialist, 75% of Scots aged between 40 and 66 say they feel unprepared for retirement, driven largely by financial worries. Around seven in 10 (69%) are concerned they will not have enough savings to fund their retirement.
The research asked over 40s in Scotland to estimate how much they have saved for retirement. The PLSA Retirement Living Standards suggest that adults need a minimum of £300,000 in savings at state pension age to achieve a ‘moderate’ standard of living in retirement. However, just one in 12 (8%) Scots say they have savings over £300,000. Nearly double the amount (14%) have no retirement savings at all.
Those living in Glasgow have the highest level of under-savings, with 52% of over-40s in the region stating they have under £51,000 in retirement savings, while 20% have no retirement savings at all.
Catherine Foot, director of Phoenix Insights, said the cost-of-living crisis in recent years has increased the strain for many people and warned that people risk “sleepwalking” into a financially difficult retirement.
“Often just thinking about your future finances can be the hardest step but a good place to start is to seek guidance from your pension provider or free online services. Without taking action to plan ahead, people are at risk of sleepwalking into retirement short of enough savings to fund it.
“Not everyone will be able to save more, however, so it’s vital there is an adequate financial safety net from the state to support people in the years prior to and beyond state pension age.”
Gail Izat, managing director for workplace pensions at Standard Life, part of Phoenix Group, called for an extension of auto-enrolment to bring more people into the scheme and give those already eligible a better chance of securing a decent retirement.
Izat said: “Last year parliament passed a bill to lower the minimum age to qualify for auto-enrolment from 22 to 18 and abolish the lower earnings limit for contributions. We urge the government to implement these changes as quickly as possible. Longer term, increasing minimum auto-enrolment contributions, when the economic conditions allow, is the single biggest lever we can pull to boost savings adequacy.”
