The Office for National Statistics has released data from the Wealth and Assets Survey covering attitudes towards saving for retirement for the period July 2016 to Dec 2016. From Nathan Long – Senior Pension Analyst at Hargreaves Lansdown.
Investing in property is seen as the way of making most of your money: 49 percent now think investing in property is the method of saving for retirement that makes the most of their money (up from 40 percent from July 2010 to June 2012). By contrast only 20 percent think an employer pension makes the most of their money (down from 26 percent in July 2012 to June 2014).
Pensions are seen as secure ways of saving: Employer pensions remain the safest way to save for retirement (38 percent), with personal pensions seeing a rise in perceived security from 11 percent (July 2014 to June 2016) to 14 percent.
Confusion on the rise: Reasons for not being in a pension sees ‘I don’t know enough about pensions’ increase from 11 percent (July 2014 to June 2016) to 15 percent (July 2016 to December 2016).
Uncertain income: The State Pension leads the way in terms of anticipated income sources as you would expect, but 23 percent are expecting income from downsizing their property and 24 percent from an inheritance.
Retirement planning: There has been a decline in people expecting to retire before 65. In addition, 27 percent of 55 to 64 year olds have not thought how long they might need their savings to last in retirement.
Nathan Long – Senior Pension Analyst at Hargreaves Lansdown: ‘Confusion with pension planning is worryingly on the rise. Investing in property is seen as the best way of making most of your money despite it being one of the least tax efficient ways to invest. More people are now citing a lack of understanding as the reason they are not in their workplace pension, even though auto-enrolment means most will not make any decisions whatsoever to join.
The tail end of the retirement journey also is starting to show signs of people expecting to work longer, but with more than a quarter of older people not properly planning their retirement the reality could be even more severe. As people live longer and the cost of social care rises, the likelihood of inheritances acting as additional income in retirement falls.’