UK - The savings gap, estimated at £27bn according to the Association of British Insurers, is well documented, says Mary Davies, director at The Pre-Retirement Association.
“According to recent research by the National Consumer Council, the most important financial concern for all income groups is the fear of not having enough money in retirement.
“Seventy one per cent of adults say they are concerned about this, rising to 84% in the 46-60 age bracket.
“Despite this concern, a financial paralysis exists so that many people while appreciating the need to “do something”, put the concern low on their agenda and actually do nothing and may not even join a good company pension scheme.
“The demand side for savings, especially for retirement, is clearly low and it is useful to consider the reasons for this.
“The supply side on the other hand is high. While the creation of more suitable products for saving is to be welcomed, in the absence of compulsion the problem will remain unless the demand side can be increased.
“So how should this problem be tackled? Understanding the barriers to saving is the first step. One of the greatest barriers is lack of knowledge and understanding of financial matters, especially pensions.
“In a recent national newspaper survey, people were asked: “How much do you need to save every month in a pension to be able to retire in comfort?”
“Many people didn’t have a clue, and those that thought they did substantially underestimated the amounts needed.
“People are becoming more aware of the effect of living in a global economy, and see that there are fewer and fewer guarantees, especially about money.
“Raising the demand side in these circumstances is an interesting and vital challenge for the 21st century.”
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