LONDON--(BUSINESS WIRE)--In light of yesterday’s pension reforms, the vast majority of UK consumers are steadily progressing into a national savings and retirement crisis, unable to take advantage of the unprecedented financial freedom now available to retiree Britain. As unveiled in nationally representative research from Avacade Future Solutions, 89% of the population do not consider saving for their old-age as important; with more than 50% rather saving towards a holiday, or not at all. In the wake of the 2015 budget and the recent pension reforms, changes to kick-start the nation’s saving funds and independent money management are the top priorities on the fiscal agenda. The motivation behind a flurry of policy-backed pre-election announcements frames a bleak outlook for tomorrow’s retirees, with one-tenth of pension planers saying they believed they would never fully be able to retire.
Utilising nationally representative research of more than 2,000 respondents, Avacade Future Solutions (AFS) today launches the UK Savers’ Index. The research underlines the motivations behind Britain’s savings profile, and the financial objectives that assume priority status for UK savers. Weighted by the overriding fact that 14.6 million adults –equivalent to 29% of the nation - are not saving at all, the research reveals a worrying truth for households across the country. Of those from the sample that are saving, twice as many are prioritising a holiday - a single trip - than are preparing for retirement. With the average UK household expected to owe almost £10,000 by 2016, the reasons behind Britain’s poor savings performance are rife. Since the economic downturn, savers have struggled to beat inflation, intensifying the challenge of funding a satisfactory retirement. Furthermore, in a recent HSBC study of the UK’s sentiments towards retirement, 52 per cent said their savings were not keeping pace with the rising cost of living, with one-third considering their mortgage as a key barrier to saving.
The research has also unveiled some interesting gender-based, age-based and regional differences between savings rates. Men and women possess different financial objectives with 12% of men prioritising their retirement, compared to only 9% of women. Instead, the female respondents prioritised saving for their children and for a new home. Young people are the most proactive age group towards savings, with 74% of 18 – 34 year olds putting money away. This drops to 69% for 35 – 55 year olds and 70% for those aged 55 plus. These findings are supported by the Unprepared Britain report that found today’s 30-34 year olds made their first pension payment 20 years earlier than those who are now retired (65+).
There is a significant divergence between the saving rates across the UK. In the East of England, 35% of the population are not saving at all compared to 23% in London and 24% in Northern Ireland. As a region, Northern Ireland is the most pension-conscious with one in five (20%) prioritising their retirement. Scotland and the East Midlands score 14% in joint 2nd place.
About the Research
The omnibus sample size for the research was 2,003 UK adults. The sample is nationally representative of the UK adult population as the data is weighted to known UK nationally representative profiles for gender, age, region, working status and social grade. This ensures that the sample is an accurate reflection of the UK population.