A greater number of UK adults think winning the lottery offers a better chance of living comfortably in retirement than making a conscious effort to save, according to research from the Equity Release Council.
24% of adults and 32% of those aged 61 to 75 are banking on a lottery win for financial peace of mind, compared with 22% who believe that a regular saving habit is their best chance of financial security in later life.
With government austerity measures expected to run until at least 2018, just one in four adults (25%) believe their ability to save for retirement will improve over the next five years.
A similar number expect to be in a worse position by 2018 (22%) while the remainder of the population is in a state of confusion or resignation. One in five do not know how their saving ability will be affected (20%) while one in three expect that nothing will change (33%).
Adults aged 61 to 65 are the least positive about their fortunes with 39% predicting their situation will worsen. In contrast those in the early years of their working lives appear more optimistic: 40% of 21 to 30 year olds expect their savings ability will improve by 2018.
More than one in four adults (28%) cannot afford to save anything for their retirement with those aged 21 to 30 most affected (34%). While this predicament lessens with age, 24% of adults aged 51 to 60 still fall into this category. Nearly a third (31%) of all adults already save as much as they can afford – but just 12% are confident they are saving enough for retirement.
Men are significantly more confident than women (17% vs. 10%) but up until the age of 50, less than one in ten of all adults are confident about their retirement saving habits. A fifth of adults aged 21 to 50 say they have got too many other things to worry about.
Attitudes to saving for retirement among UK adults:
All UK adults | Aged 18-40 | Aged 41-60 | Aged 60+ | |
| I am confident that I am saving enough | 12% | 8% | 13% | 28% |
| I am already saving as much as I can afford | 31% | 23% | 40% | 27% |
| I am already saving, but only a small/token amount | 13% | 17% | 11% | 3% |
| I can’t afford to save anything | 28% | 32% | 26% | 18% |
| I don’t need to start saving at my age | 3% | 5% | 1% | 7% |
| I don’t understand how much I need to save, so don’t | 4% | 6% | 3% | 2% |
| I have got too many other things to worry about | 16% | 20% | 14% | 8% |
Nearly seven in ten UK adults (69%) believe the best time to begin saving for retirement is when you start full time work. But only 46% actually do so with 17% waiting until their employer offers them a pension.
A further 11% wait for a pay rise or promotion as the trigger to begin building a retirement saving pot. Nearly one in ten (9%) wait until they have bought a home while 5% wait until they have had children and 4% delay until after they get married.
One in four adults (25%) say they will regret not making more effort to save by the time they retire, with even more (26%) arguing it is not practical to save enough in this day and age. Although nearly one in five (19%) feel guilty they don’t make more effort to save, 16% think it is more important to enjoy life now than worry about meeting costs in later life.
Nigel Waterson, chairman of the Equity Release Council, said: “Although winning the lottery would be the answer to many a prayer, planning for retirement is far too important to be left to chance. Ideally people should start saving for retirement early, but it is understandable that this is not always realistic given the increasing cost of living.
“To plan effectively it makes sense to recognise that for many adults – especially those who are nearing retirement – their home is their most valuable asset. Rather than turning to their property wealth as a last resort when times are hard, equity release can help people make proactive plans to maintain their lifestyle in retirement. Releasing equity from their homes can provide a regular income while still protecting a proportion of its value to leave as an inheritance.
“It is unfortunate that the over-55s are cut off from many forms of borrowing just at the time of life when they need it the most. But with equity release they can enjoy a more comfortable and financially secure retirement through wealth they have already accumulated.”
