'Ostrich generation' failing to save for retirement
Britons are burying their heads in the sand instead of making adequate pension provision for the future, says a new report.
HSBC's 'The Future of Retirement' reveals that 68% of Brits admit they are worried about coping financially in their later years, yet only 39% have made financial provision for this stage of their lives.
David Wells, head of investments, pensions and savings at HSBC is concerned by the emergence of this 'ostrich generation.' He says: "Britons know that they need to plan and save more for their retirement, yet are not turning this knowledge into action."
"People need to look around and take proper stock of what they need to do – they can no longer totally rely on the state or their employer to provide for them. In the 21st century it is all about taking individual responsibility," Wells adds.
The government has already unveiled future plans for a universal state pension that will be worth around £140 a week. It has also moved forward the increase in the state pension age from 65 to 66 to 2020 instead of 2026.
These moves are designed to address the growing pension gap; however, like HSBC's warning, the government is keen to stress that state pension provision alone is insufficient for most individuals.
The bank's report also shows that in spite of government warnings the ostrich generation still expects to stop working full–time in their mid–50s before retiring completely at age 62.
Consequences of not saving
Pensions analyst for Hargreaves Lansdown Laith Khalaf says that while ducking the question of saving for retirement isn't a new phenomenon, the consequences now are much worse.
"In the past we could get away with it because employers offered final salary schemes and the state pension was more generous. However, individuals now carry more responsibility for their own retirement than ever before, and if they fail to make savings no one's going to turn up with a magic wand when they retire."