Retirement unlikely for 12% of global workers

Nearly one in eight (12%) of respondents think they will never be able to afford to retire fully, according to research by HSBC.

The future of retirement report, which surveyed 16,000 people in 15 countries, found that this figure is higher in some countries.

In the UK, 19% of respondents expected they would never be able to retire fully, while 18% of US respondents said the same. This is followed by Canada and Singapore (17%), Egypt (16%), Australia (15%) and India (12%).

Among those who have retired, 38% found their income was less than they had expected. Of these, one-third blamed the global financial crisis, while another third said they had not planned adequately.

The research also found:

  • 63% of retired people worried that they did not have enough money to live on and 70% regretted not having saved more.
  • 44% of respondents aged between 55 and 64 said it was an aspiration to continue working.
  • 17% of respondents aged between 55 and 64 expect they will have to continue working indefinitely.

Simon Williams, group head of wealth management at HSBC, said: “Generating an adequate income in retirement remains a major challenge for most people, given the financial conditions created by the global economic downturn.

“Today’s workers should prepare for retirement as early as possible to have some certainty. Life is full of reasons to prioritise short-term spending over long-term planning, but the sooner people start saving, the less they are likely to need to carry on working in retirement.”

Clare Abrahams, head of auto-enrolment at Lorica Employee Benefits, added: “The pension problem returns, over and over again, to this… it is okay to get to retirement and not have a decent pension, but it is never okay for it to be a surprise. 

“And that’s what most people are living with now, heads in the sand, surprised when they don’t have enough money for retirement.

“While government policies such as auto-enrolment are supposed to correct this, the hard truth is that until Britons understand more about their future savings, the surprise factor is inevitable.

“Steve Webb, pensions minister, has given himself a pat on the back re auto-enrolment, saying low employee opt-out rates are evidence of success, but a closer look shows only a tiny minority of UK pension savers are saving enough for a comfortable retirement. And this is not likely to be the case even when the full auto-enrolment contribution levels come in 2018.

“Suspicions of pensions abound in this country, and worse, too many people believe their current property will provide their pension scheme. Unfortunately, this is dangerous thinking, and not enough is being done to correct it.”