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30.11.12

Over-50s ‘sleepwalking into old age’ – NAPF

A new study suggests that too many people in their 50s are not adequately preparing for their retirement, which will leave them poorer than expected.

The National Association of Pension Funds (NAPF) and the Institute for Fiscal Studies (IFS) found that a third of people aged 52-64 have no idea what their workplace pension income will be in retirement.

And six in 10 over 50 have not yet thought about how many years of retirement they will have to save for. NAPF is calling for people to start saving more in order to prepare for their old age.

The study also found that women in their 50s believe they will live until 84, when the national life expectancy is actually 88. Men in this age group believe they will live until 83, when their life expectancy is 85. This gap in life expectations means that many are not saving enough.

NAPF’s chief executive Joanne Segars said: “Fortunately, people are going to live longer than they think, but they are not planning for it, so they might find their savings and pension do not stretch far enough.

“Millions of people are within a decade of their state pension but have still not thought about how long their retirement might last. It’s worrying that so many over-50s are sleepwalking into their old age and are expecting to be better off than they will be. It does not help that the annuity market has become so tough.

“They need to see their pension pot grow by almost 80% to meet their expectations. That is a huge ask if they are only a few years away from their retirement party.

“It is not too late for the over-50s to take some control of their retirement plans by adjusting the amount they save, or how long they are prepared to work for.”

The report is at: www.ifs.org.uk/comms/r73

Tell us what you think – have your say below, or email us directly at opinion@publicsectorexecutive.com

Comments

Norman   14/01/2013 at 14:33

Having noted the suggested life expectancies, I searched for other similar projections. An article in the Mail Online dated 14 Jan 2013 "How Long Will You Live" suggested the UK data for men is 78.05 years and women 82.4 years. These are about 6 years less than NAPFE data. Conclusion: read the Mail and have a relatively short but comfortable retirement, or believe NAPF and live longer in potential poverty. Of course, the latter option could be offset by ploughing more money into pension funds, that you may not live long enough to enjoy fully!

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