People 'saving less for retirement'.

25/05/2011

In the past year there has been a dive in the savings levels of people who are about to or have already given up work, a study has suggested.

Opinium Research conducted the survey, which found that 17% of people who are retired or are preparing to do so in the next five years are making monthly savings that are an average of £342 less than what they were a year ago.

Private pension plan holders have seen the biggest drop in the amount being set aside, falling by £434 a month or £5,208 a year.

The amount that is being saved to support people after they retire has fallen by more than double the £137 a month savings drop that was experienced in 2009.

The reduction in the amount being paid into pensions and savings accounts, along with the fact that 25% of people are not saving at all, suggests older people were being forced to deal with more immediate financial strains, rather than making provisions for the long term.

The situation is being made worse for 32% of people who are approaching retirement, as they said they were still being asked to provide financial support for their adult children.

A Department for Work and Pensions spokeswoman said: "We know that people just aren't saving enough for retirement and this is exactly why we will be automatically enrolling people into a workplace pension from October 2012.

"This will be a welcome boost for people who are struggling to save on their own and will mean that five million to eight million people will be saving for the first time or saving more for their retirement."

Copyright Press Association 2011