A study into ‘retirement readiness’ has discovered that the UK is a world leader when it comes to prioritising savings for pensions. Successful Retirement – Healthy Aging and Financial Security examined what retirement and pension means to different people around the world, revealing that Britain is second only to Holland when it comes to a reliance on workplace savings for retirement funding.
British workers are expected to save a third of their retirement through the workplace through automatic enrolment in the office, 42% from government funding and the final quarter should come from a worker’s own savings. This is notably comparable to Spain, where 11% of retirement income comes from workplace schemes.
Young people have very different expectations when it comes to the workplace and the future, expecting 35% of their pension to come from the government compared to baby boomers, who expect 50% of their retirement to come from the state. More reliance is being put on private pension schemes, as younger generations still expect to retire in their mid-60s despite the state pension age rising again.
“Retirement has long been characterized as a ‘three-pillar’ model with government benefits, employer pensions and personal savings all supporting individuals when they stop working and no longer have earnings from employment,” said Steven Cameron, Aegon UK’s Pensions Director. “There are significant global differences in the extent to which people expect their retirement income to come from each of these pillars, depending on the retirement system in the country where they live.”
“While UK employees benefit from the workplace pension focus, the ever increasing numbers of self-employed don’t,” he explained. “This highlights the need to focus on how to improve pension provision for this significant element of the working population.”