Pension saving reaches five-year high

Ian Naismith

The number of people saving adequately for retirement is at its highest level since 2009, according to research by Scottish Widows.

Its 10th annual Scottish Widows Retirement report, which surveyed more than 5,000 people, found that 53% of respondents are saving enough through a pension scheme, up from 45% in 2013, as the impact of auto-enrolment and improvements in the economy take effect.

The research also found that the monthly amount the average employee is willing to contribute towards their retirement savings has also increased by 141%, from £54 in 2006 to £130 in 2014.

However, a third of respondents still have no idea of the extent to which their pension, savings and investments will meet their retirement income needs.

The research also found:

  • The average proportion of annual earnings put aside by employees in organisations with 250 staff or more has increased from 9.7% to 11.6%.
  • 37% of respondents feel more optimistic about their long-term finances, compared to 32% in 2013.
  • 32% of respondents do not believe they will be better prepared for their retirement than their parents were.

Ian Naismith (pictured), pensions expert at Scottish Widows, said: “A decade of tracking retirement savings trends has shown us the impact that events such as the recession, auto-enrolment and the recent Budget announcements have had on the nation’s savings behaviour.

“It is heartening to see that finally people are starting to sit up and take notice of the importance of planning for the future, whether this be through proactively upping their contributions due to a more favourable economic climate, or starting to make plans for their retirement for the first time thanks to auto-enrolment.

“Although we have undoubtedly made some significant strides forward since our research first began, there are still some groups which are not preparing adequately for a comfortable later life and are at risk of slipping through the net.

“While celebrating the success of the wider savings picture, we must not forget to identify and support these at-risk groups, such as the self-employed or part-time workers, to make sure they too have a plan for securing their financial future and do not get left behind.”