Still little enthusiasm for retirement planning in UK, says survey

Jun 07, 2012 By Fraser Wilson

Three quarters of Britons are still making little provision for their retirement, according to new research.

This comes despite growing pressure on people to safeguard their financial future.

The survey found that only five per cent strongly agree that they “put lots of effort” into planning, with a further 20 per cent agreeing to some extent.

Even fewer people – less than 20 per cent – were found to be in any way “excited or energised” by the prospect of trying to ensure their comfort and security in later life.

The research was carried out by the Financial Services Research Forum, which is based at Nottingham University Business School. It drew on responses from a representative sample of 2,000 consumers questioned in an online survey conducted by YouGov.

Striking a balance

Professor James Devlin, Deputy Dean at Nottingham University Business School, believes the findings highlight the necessity of finding new ways to persuade people to save.

He said: “Given that the government is increasingly expecting individuals to provide for their own retirement, these findings aren’t encouraging.

“They show policymakers will need to explore imaginative approaches that promote more saving but don’t require great effort on the part of savers.”

Uninteresting and uninspiring

The survey also found that less than three per cent of those questioned strongly agreed with the statement “When making financial plans for retirement I feel excited and energised”. Barely 12 per cent agreed with the statement to some extent, while 14 per cent strongly disagreed, 34 per cent disagreed and 37 per cent neither agreed nor disagreed.

Professor Devlin said: “These figures provide strong evidence that individuals find the relevant financial services intrinsically uninteresting and uninspiring. This is particularly worrying when it’s so important to convince the population to engage with such services and provide for themselves adequately.

“Such low levels of interest demonstrate the size of the challenge facing policymakers as they seek to encourage greater participation.”

Financial reviews

Just seven per cent of those surveyed strongly agreed with the statement “I review my financial plans for retirement on a regular basis”.

Professor Devlin said: “This shows most of the population aren’t committed to regular reviews. This isn’t helpful if, for example, savers are going to increase provision to adequate levels under the proposed National Employment Savings Trust regime.”

A challenge for policymakers

According to Professor Devlin, the study underlines the scale of the challenge policymakers face in improving pension saving.

He added: “The overall picture is a population that is far from enthused by the prospect of retirement planning and unwilling to make a large effort.

“These two factors in particular help account for the fact that actual levels of retirement savings in the UK generally remain far too low.

“Many people might be committed to the task – or at least think they are – but most still can’t look forward to a retirement of financial comfort and security.”

The Forum is unique in bringing together all stakeholder groups for the purpose of informing policymakers in the public, private and voluntary sectors.

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AWaB
not rated yet Jun 08, 2012
In the U.S., we know that social security will be decreased or gone before the 40 and under group gets to it. So who's saving? Not many. Most people don't look past next week, much less look 20 to 50 years down the road. You can't force them to do it. We've also proven that we can't trust the politicians to do it for us, either!
Czcibor
1 / 5 (1) Jun 10, 2012
AWab:
"You can't force them to do it."

I would say that if you speak merely about technical possibility you can force people by ex. withholding some % of their salary and send it to an account that can tapped later. Roughly that was the idea of most social security systems, though they also usually prescribe some kind of equalling of outcomes. (Though there was a hidden assumption that irresponsible citizen would be saved by a responsible politician :D )

Anyway - it could be implemented a system in which citizen is obliged to save some additional money on his own account but with no additional politicians involved, where it's simply his cash that can be used after exceeding let's say 65.

I personally consider this study as rather worthless - instead of asking how much they invest for their retirement (in wider meaning - investing in education or real estate also counts) people were asked what they think about investing.
yaccaking
not rated yet Jun 10, 2012
I do not agree the study was "rather worthless" for, any research/study/or reporting on the need for retirement planning raises the profile of the issue. We should encourage more of the same.