More than half of adults do not make pension contributions due to financial pressure, ONS research finds.
Huge numbers of the British public risk retirement struggles as they neglect their pensions due to low incomes, debt and unawareness of how these work, research reveals.
Just over half (54%) of adults say they do not pay into a pension due to low incomes or being unemployed, according to the Office for National Statistics (ONS).
The ONS Wealth and Assets Survey is carried out every two years and gives a snapshot of how under-60s are treating their retirement planning. The latest release covers the period between April 2018 and March 2020.
The proportion of people not making pensions contributions due to financial pressure was 48% for men but almost 60% for women. On a regional level, these reasons were highest for adults in Wales (61%), the North East (61%), Yorkshire and the Humber (58%) and London (58%).
One in ten British adults say they do not save into a pension because they do not understand them.
This rose to 16% for the 30-39 age range, below 12% for 16-29, 8% for 40-49 year olds and just 5% for those aged 50-59.
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This reason was cited the most by those living in the South West (15%), followed by Yorkshire and the Humber (12%), and the least by the North East with just 6%.
More than two in 10 people could not afford to save into a pension in general, while 16% had too many expenses, bills or debts to do so.
Some 6% said it was too early to start a pension, and 8% preferred alternative ways of saving.
Other reasons given were not being interested in pensions or not having the time to set one up (6%), not trusting pension companies or schemes (4%) or having changed jobs recently (4%).
Since 2012, more than 10 million people have been auto-enrolled into workplace pensions, while one million have opted out.
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Pensions expert and commentator Henry Tapper says: “I’m saddened and disappointed that there are a lot of people who could save into a pension but at the moment just find it too difficult for various reasons. They aren't given the help and knowledge on how and why they should save. They will almost inevitably need not just the state pension, but a considerable extra amount of state help in retirement.
“There is a certain amount of disillusionment among people about pensions - they have trouble getting the right kind of information about their pension, and so they feel very disconnected. And there are large sectors, in particular the self employed, who simply don't get access to pension auto-enrolment.”
On a positive note, the ONS found 57% of people now see pensions as the safest way to save for retirement, up from just 47% a decade ago.
Quilter retirement expert Ian Browne called it a “significant shift” and showed people are starting to see the “enormous benefits” of a pension.
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