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Latest News
19 Nov 2014

Just 6% Of UK Workers On Track For Retirement Income

New research reveals that a mere 6% of UK employees look set to achieve their desired retirement income, Employee Benefits reports.

Despite the recent pension reforms bringing a lot of attention to the issue, Aegon´s ‘UK Readiness Report´ - the second of its kind - found that UK savers still aren´t adequately prepared for their retirement.

The report surveyed 4,000 UK employees to assess how ready they were for retirement, looking at their behaviour, awareness and finances. A readiness score out of 100 was then determined; but it was found that the average readiness score had fallen from 52 out of 100 in April, to 47 currently.

Furthermore, the number of employees with a readiness score of below 30 has more than tripled, from 4% to 13%.

Researchers suggests that the main cause for this decrease is rising expectations of retirement income – with employees now wanting to live off an average of £41,000 a year during their retirement, compared to £35,000 in April.

On a positive note, the study found that nearly a third of respondents (32%) are more confident about pensions after the announcement of the Budget reforms, with only 4% feeling the changes would make them worse off.

Further findings show that people are largely slack when it comes to their savings: half (50%) of respondents admitted to never having checked the performance of their savings, whilst 47% said they do not make regular pension contributions.

What´s more, only 30% knew the current value of the maximum state pension (£113.10), and one quarter (25%) overestimated how much they would receive.

David Macmillan, managing director of Aegon, said: “The Chancellor radically changed the way people will be able to access their pension with his Budget announcements.

“It´s possible however, that the positive news has increased people´s expectations […] People need to be realistic with their goals, but the pensions industry must support them to achieve this by providing simple products.”

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