I would like to retire when I’m 55, or 60 at the latest. Preferably with enough money left over in the pot to buy a holiday home or two, pay for champagne whenever I fancy some and ensure I have a wardrobe to match. So far, so Absolutely Fabulous.
However the reality is more likely to be Victor Meldrew than Patsy and Eddie. The gap between what I know I’ll need to finance this fairytale retirement and what I’m likely to have is huge. Unfortunately ‘I do belieeeeve it’.
A quick poll with some of my 25-35 year old peers confirms my suspicions that I’m not alone in my retirement fears. Reactions to the word ‘pension’ brings a host of responses (none positive). Some look at me in horror, others shrug guiltily and change the subject, whilst others start to rant about having to work until they’re AT LEAST 80!
We all know that we need to start saving for retirement as soon as possible, but priorities and life can get in the way. As far as life stages go… the priorities are shifting. For many 20 and 30-somethings it’s difficult enough to find the deposit for a house at the moment with tighter mortgage lending, never mind worry about how they will save for retirement. The urge to stick their head in the sand regarding retirement and worry about it later is appealing. Research shows us that saving for retirement is just not on the radar for young people. In fact, when questioned, only 15% of 25-34 year olds agree that saving for retirement is top of mind, compared with 33% thinking about moving house and 44% paying off debt. Again, it’s a question of priorities.
For those of us in the 16-34 age range with pension provision (28% of those aged 16-24 and 50% of those aged 25-34) most of us can hardly feel smug when the annual forecast lands on the doormat. Indeed, around half of ‘young’ people aren’t confident that their current provision will be enough to support them through retirement at all (43% of 16-24 yr olds and 51% of 25-34 yr olds).
So, what about state provision? I personally don’t fancy my chances with that. In fact, 32% of 16-24 year olds and 41% of 25-34 year olds aren’t prepared to take the chance that the state pension will be enough to see them through retirement. And as one of my friends put it… “State pensions probably won’t cover the cost of a cup of coffee in 30 years time”.
So why aren’t we doing something about it? Is it a lack of education? Will the auto-enrolment due to commence on 1st October help to bridge the gap? Can pensions ever move up the priority list? Will I ever get a chance to channel my inner Patsy?
N.B. Data taken from the Harris Interactive Omnibus Survey conducted with 1997 adults in the UK during 7th-15th August 2012. Data has been weighted to be representative of the UK population.
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