Retirement saving drifts

by Gill Montia

Story link: Retirement saving drifts

The Pensions Advisory Service (TPAS) has published research indicating that in recent years, people have been less likely to put money into some sort of pension provision.

According to TPAS, many people approaching retirement have ceased saving towards a pension altogether.

The change is attributed to a number of factors, including pressures on personal finance and an increasing dependence of adult children on their ageing parents.

Data from the Office of National Statistics shows that in 2005/06, personal pensions accounted for 3% of pensioners’ income.

At the same time, state benefits accounted for almost half, and income from occupational schemes represented a quarter.

Malcolm McLean, the chief executive of TPAS, believes that many UK adults approaching retirement are under pressure to pay off debt.

As a result, they are continuing to work but are unable to save an adequate amount for retirement.

Some have used their capital to help their children get on the property ladder and therefore still have large mortgages to pay off before they retire.

The Prudential Retirement Income Panel also has serious concerns about the UK pension crisis, which it believes is set to worsen in the coming years.