Almost two out of three British people believe that they could not retire on the £140 a week that will form the state pension, a percentage that rises higher still for people aged 55 and over, our survey for long term savings and investment firm Standard Life has revealed.
- 63% of British people say they couldn’t live on £140 a week in retirement
- 72% of those aged over 55 believe they would not be able to live on £140 a week
- Just 17% of those aged over 55 think they would be able to live on the amount
- Similarly, only 13% of those aged 45-54 thought £140 a week was enough for retirement
- However, younger people are more optimistic, with a larger 29% of 18-24 year olds thinking that they would be able to live on the retirement amount per week
The pros and cons of the state pension
The Government has recently proposed a single-tier flat-rate state pension worth around £140 a week, and are currently consulting on how this might be introduced in 2015 at the earliest. But while the young are more likely to think £140 a week is OK, those in the older age ranges do not.
John Lawson, Head of Pensions Policy at Standard Life said: ‘The introduction of a state pension of £140 a week for all is to be welcomed. This makes it clear and easy for people to understand what they will receive from the Government as a pension. However, people clearly recognise that £140 a week will not likely be enough to live on in retirement.
Shopping to save
‘We need to get more people to save more,’ Lawson continued. ‘This means encouraging people to take ownership of their financial futures by providing access to the right level of information, financial advice and products at the appropriate times.’
Lawson concludes that our figures indicate that people need to take more care to improve their financial health in order to supplement the proposed pension amount. ‘Sort out your basic finances and make a budget each month,’ he suggests. ‘Check you are paying the lowest possible price for basic services such as utilities, car and home insurance. A few hours spent shopping around can save you hundreds of pounds a year.’
And don't be afraid to take some risk [when it comes to savings]’ he continues, ‘particularly if you are investing for the longer-term. Savings providers now offer personalised investment portfolios, such as the Standard Life MyFolio funds, that match the level of risk you are comfortable with.’
Pensions and ISAs are enough to meet the savings needs of 99% of the population.’
