Millions of older workers panic saving for their pensions

Sep 13 2005 by Nic Paton Print This Article

Some 2.6 million people in their fifties and sixties are panic saving as it dawns on them they have failed to save enough for their retirement, a survey has suggested.

The study by insurer Prudential offers a grim snapshot of what workers and employers can expect much more widely in a couple of decades time if the UK's pensions' timebomb is not resolved.

Prudential said around 17 per cent of the 600 people aged between 55 and 64 polled were scrambling to save extra, setting aside at least 20 per cent of their monthly income, while 3 per cent were saving at least half their income in bid to boost their pension.

More than a quarter of this age group said they had had to cut back on holidays so that they could focus on saving for their retirement, while 21 per cent were going without a new car and 18 per cent were socialising less.

People were also economising when it came to buying new clothes, investing in home improvements or spending money on children and hobbies.

Just under half rued the fact that they had not saved more towards their pension earlier in their lives.

Nearly a third said they had worked overtime during the past year to earn more money.

Stephen Lowe, director of worksite communications at Prudential, said: "Panic saving as you draw close to the end of your normal working life is not ideal.

"It is much better to have a financial plan in place as soon as possible and preferably when you first start working.

"This will not only help ensure that you have a bigger retirement fund but also help you finance other major events in your life," he added.

Just yesterday, the TUC warned that employers were continuing to duck the issue and that compulsion might be the only answer to resolving the crisis.