Posted on: 10-04-2017 in Pensions
The average UK pension pot has rocketed in value in two years to £50,000, according to research from financial providers Aegon. Behind the surge in saving is a new awareness of pensions amongst Brits brought about by the Government Pension Freedoms of 2015, in which a number of liberating measures were announced.
The research also shows that men continue to save roughly three times as much as women. Why? Reasons for the pensions gender gap often offered by experts include men earning higher salaries and receiving higher employer pension contributions, as well as women having less confidence in investment). See Table 1:
TABLE 1: Average Size of UK Pension Pot, 2015-2017
Source: Aegon, 2017
“Pension-awareness” is a big issue for consumers. We need to be aware of what our retirement is going to look like, so we the rest of our financial picture can be built around it. And, if we don’t even look at our pension situation – complicated though it may be – we can’t begin to tackle its complexities.
So it is good news that this research reveals that Brits are waking up to the importance of their pension:
In terms of pension-awareness, the industry would always like to be doing better:
A quarter of the UK population expect to be still working full-time past the age of 65.
Almost a third are putting off the decision about what to do upon reaching State Retirement Age (SRA) until they get to it. From Aegon’s figures, it seems that roughly one in ten of us is very confident what our retirement is going to look like, a third of us have some sort of idea – and over half of us don’t have a clue. Congratulations if you number amongst the one in ten with firm plans in place.
So generally, as Brits, our retirement plans are newly reported to be hazy, and getting clearer. We are becoming more positive in our approach, although expectations of pensions remain unrealistic: the average annual retirement income aspired to this year by Brits is £32,270 – with the average entire pension pot last year being worth only £35k. We were more unrealistic in our aspirations last year, with a figure of £37,912 averaged as a preferred annual retirement income.
Figures for this bulletin come from Aegon, the financial services provider, who produced the research from a representative sample of 2004 Brits taken in December 2016;