6th October 2014
Pension savers in the North East, Scotland and the North West are the most active when it comes to securing their long-term financial future according to new research from insurer Friends Life.
In contrast, retirees-to-be in the East Midlands, East of England and the South West are the laggards, where almost three in five people are not saving into a pension at all.
Benchmarking how active consumers are in saving into a pension for the future, insurer Friends Life has created the UK Retirement Savings Map based on the savings behaviour of more 18,000 people (see infographic below)
Currently almost three in five, at 58% of people, hold some form of pension with two in five or 23% investing the maximum amount they can afford. Income from the state pension, savings, investments, property and private and workplace pensions were considered some of the most popular methods for people to fund their retirement.
But despite this the average total amount of savings is not sufficient once living and housing costs have been factored in, with people facing a financial shortfall of £96.67 per week given the majority expect to need £409 per week in retirement, while their actual weekly income will be typically £312.
The data also found differences in people’s understanding of their future income needs. In the South West and North East, residents are most aware of the income they will need in retirement with the lowest shortfall between their likely income and housing and living costs. However, the East of England and Greater London are the least prepared and can expect the greatest financial shortfall in retirement. On average, those in the East of England face an income shortfall of £105.38 per week and Greater London a shortfall of £123.85 per week.
The difference in attitude to retirement savings also varies by city:
Andy Briggs, group chief executive at Friends Life said: “It is encouraging to see areas of the UK where savers are actively managing their finances for their future. Acting today means these people are best positioned to secure the future they want in retirement.
“However, our map shows that there are worrying areas of financial deficit where a combination of a lack of awareness, lack of planning and soaring living costs mean a future situation of income shortfall. It is concerning that there are regions of savings deficit within the UK and as a business we want to support these customers in securing as much income as possible for their future. We, as an industry, together with government, employers and financial advisers need to do everything we can to help people in the UK to save for their future to secure their financial well-being during retirement.”