In the past, it was very easy to push your pension to the back of your mind. After all, you won’t need it until you retire, so why think about it now? Thankfully, this mentality has changed and it now seems that Britain is waking up to the importance of pensions and financially planning for their future.
Each quarter, personal pension provider and investment specialist True Potential Investor conducts a survey into consumer attitudes to savings and debt. The results published in the Tackling the Savings Gap Consumer Savings and Debt Data Q4 2016 report show a positive increase in those contributing to their pension.
In Q4 2016, 74% of respondents contributed to a pension. Just 26% did not — down a huge 9% from 35% in Q3 2016. It’s promising to witness the growth in the number of young people putting money into their pension too. Just 13% of 24-34 year olds made no contribution to their pension in Q4, down from 19% in Q3 2016.
With more of us putting money aside for our futures, the average amount we’re contributing is increasing, standing at an average of £566 per month. But where in the UK is putting the most — and least — towards their pension?
According to the report, Northern Ireland made the largest pension contribution; 11% of respondents in this region managed to add over £5,000 per month to their retirement funds. 8% of Londoners did the same, followed by 6% of respondents from the East and East Anglia.
Interestingly, Northern Ireland also had the second largest percentage of people who had put nothing towards their pension over the quarter. This underlines a clear split in pension attitudes within the country. The South West had the highest percentage of zero pension contributors, with 40%.
Regardless of the amount, which region has the highest proportion of pension savers? Just 18% of respondents from London failed to contribute to their retirement fund in the quarter, helping the city take the top spot. In second place was the North East with 22%, followed by Scotland and the West Midlands both with 27%.
Now that we know how much we’re contributing to our pensions, just how much will we need? The report shows that £23,000 will be needed per year in retirement to live comfortably. However, based on our current saving rates, we’re on course to receive just £6,000 per year from our pension pots.
Of course, the amount you need will be based on your pre-existing financial commitments and the life you’d like to lead during retirement. True Potential Investor’s Saving For Retirement interactive quiz can help you work out how much you’ll need in your pension pot by the time you retire, by asking a few questions about your current expenditure and future plans. Take the quiz today to find out how much you could potentially need to save.