Almost half of savers stopped or reduced the amount they were saving for retirement following the economic downturn, research by HSBC has revealed.
The research sheds light on the long-term effects the 2007/08 financial crisis had on retirement saving.
The survey of more than 2,000 people found that 41% either reduced their savings or stopped them altogether after the financial crisis hit.
During the downturn:
- 31% stopped or slowed down their savings in cash deposits
- 25% reduced or withdrew their investments
- 25% cut down or stopped saving into a personal pension.
Many people haven’t returned to their pre-crisis level of retirement saving, despite the recent economic recovery:
- 52% say their income is not keeping pace with the rising cost of living
- 30% say mortgage repayments are preventing them from saving
- 31% say other debts are an obstacle to retirement saving
- 52% cannot afford to save for retirement.
The research also found:
- 37% of UK workers are not currently saving for retirement
- 31% of over-45s do not have plans to start retirement saving
- 4 in 10 expect their standard of living to fall in retirement.
Caroline Connellan, head of UK wealth at HSBC, said:
“Today’s workers have greater responsibility to think carefully about how much they’ll need for a comfortable retirement. This can sometimes involve quite complex decisions on the various savings and investment options and most people will benefit from financial advice.
“The budget changes, which create greater freedom and choice on pensions from April 2015, have resulted in more interest from our customers to review their retirement plans. If there’s one action we should all consider, it’s to start saving as early as possible: even the smallest amounts saved now can make the likelihood of a comfortable retirement all the more real.”
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