Concerns over falling level of Scots saving for retirement

L Young people in particular failing to put enough aside l Increase in those saving nothing on higher debt levels

The number of Scots saving enough for retirement has fallen since last year, as those putting aside nothing at all increases amid growing personal debt, a report published today has found.

According to the 13th annual Scottish Widows Retirement Report, the number of Scots saving adequately has fallen to 59 per cent from 61 per cent, dragged down by the level of those saving nothing growing to 25 per cent from about 20 per cent.

The Edinburgh-based pensions firm said younger people in particular are struggling, with 70 per cent of those aged 22 to 29 not putting enough aside for life after work. The study also found in contrast that nearly three quarters of those aged 50 to 59 are saving an adequate amount.

Catherine Stewart, retirement planning expert at Scottish Widows, said: “The drop in adequate savers in Scotland over the last 12 months is a real concern and it is especially concerning to see how much the younger generation is struggling to put enough away for later years.”

Scottish Widows, recently subject to rumours of a tie-up with Standard Life, also shone a light on auto-enrolment, saying that one in three is paying into a pension because of this, whereby employees contribute at least 1 per cent of their salary into a pension pot, matched by their employer.

However, Scottish Widows said this level is “significantly below what is required for a comfortable retirement” and suggested a combined 12 per cent employer and employee contribution as an adequate level of saving.

The business also said 29 per cent of Scots said they can’t afford to save any more into a workplace pension than they do now, a jump of six percentage points in the last year.

It comes as average debt levels have risen by more than £2,000 in the last year to more than £10,800.

Stewart also said that to help the younger generation start to seriously consider retirement savings, it is necessary to understand what they need to know. “Younger people are far more likely to engage with technology and information that can be easily digested,” she said, adding that Scottish Widows has been investing in digital innovation and will continue to do so.

“We have therefore created a series of Pension Basics films available on our Youtube channel and are currently developing a smart phone app allowing members of corporate pension schemes to keep track of how their savings are growing,” she said. Inverness-based Mime Technologies, a medical tech firm offering software that helps first responders in emergencies, has won £80,000 and a trip to Silicon Valley from Scottish Edge, a competition to foster start-ups. Pictured from left are co-founder Anne Roberts, chief executive and founder Alasdair Mort and clinical lead Chris Williams. Mort said the win means it can expand its team “and engineer our software to work on any mobile device around the world”.