Over 20million looking to rely state benefits in retirement

Over 20million looking to rely state benefits in retirement

According to recent reports, one in three adults have not made a pension provision at all – instead preferring to rely on a state pension to assist in funding their retirement.

Currently, despite just over half of UK adults are saving into an ISA account, very few of them are doing so with the intention of saving for the future. Only three percent surveyed said retirement saving is a financial priority to them.

One in four intent to rely on a company pension, while only four perfect are using an ISA as an alternative retirement income solution.

Neil Lovatt, financial products director at Scottish Friendly, said:
“Pensions clearly have a role in saving for retirement, and we applaud the Government’s recent proposals to make pensions more flexible and accessible. However, we feel that an ‘ISAs first, pensions second’ strategy could serve some people better. Even though the government’s proposals are an improvement on the previous system, people who have invested in a pension still have their money tied up until they reach a certain age. By investing in ISAs, consumers have a more flexible route to retirement planning.”

Lovatt continued:
“By moving savings into a pension later in life it’s locked up for a shorter period of time. It’s important to remember that savers will also have a much better idea of the tax landscape at that time. An ISA is a good option for anyone who is starting to think about the best way to start building a retirement fund, especially those on lower incomes. Any contribution to an ISA, even as little as £10 per month, is a good place to start. If you use your ISA first you can benefit from the access and flexibility it provides throughout your retirement.”

The Disposable Income Index report has been commissioned by Scottish Friendly to examine people’s attitude towards saving and investing on a quarterly basis.