Millions of savers ‘ risk comfortable retirement’

● Four in five are not confident they are putting enough aside for later life

Mi l l i o n s o f p e n s i o n s ave r s are in the dark about whether they are on track for a comfortable retirement financially, a report warns.

Four in five ( 80 per cent) people are not confident they are putting enough aside for later life, the Pensions and Lifetime S avings Asso ciation ( PLSA) said.

This equates to 30.4 million working age people across the UK who risk not being able to afford the lifest yle they want in later life.

The findings were made in the PLSA’S Hitting the Target r e p o r t , whi c h a i ms t o h e l p people achieve better retire - ment incomes.

It calls for the introduction of retirement income targets showing the lifestyle someone could afford on different levels of income. The PLSA has commissioned researchers to develop these.

0 Around 30 million people risk not being able to afford the lifestyle they want in their later years

Seven in ten ( 70 per cent) people think retirement income targets would encourage them t o s ave more, i nc r e a s i ng t o more than three - quar ters of ( 78 per cent) those aged 18 to 34, the PLSA found.

While a third ( 34 per cent) of people say they could save more for retirement, uncertaint y about how much cash they will need may be holding people back, the repor t suggested.

Automatic enrolment i nto w o r k p l a c e p e n s i o n s w a s i n t r o d u c e d i n 2 0 1 2 t o h e a d o f f f e a r s o f a l a t e r l i f e s av - ings crisis. Minimum contribution rates i nto workplace pensions are gradually being stepped up to encourage people to save more.

But many p e opl e wrongly a s s ume t hat t hi s minimum level is the target they should be aiming for to be comfor tably off, the report found.

The minimum auto - enrolment p e nsi on c ont r i but i on rate is 5 per cent, increasing to 8 per cent next year. Rates are made up of contributions from staff and employers.

Just over half ( 51 per cent) of people wrongly believe the minimum rates are the recommended amount to save.

The rep or t also said minimum contribution levels for automatic enrolment should be boosted from 8 per cent of band earnings to 12 per cent of total salary between 2025 and 2030, with at least 50 per cent of this coming from employers.

Nigel Peaple, director of policy and research at the PLSA, said: “Millions of savers are in the dark about whether they are on track for the l i fest yle they want in retirement.

“Wi t h f u t u r e g e n e r a t i o n s unlikely to have the same levels of property wealth, or final s a l a r y p e ns i ons, a s c urr e nt retirees do, i t’s vital more i s done to ensure people can cover the costs of later life.”

Around 1,500 people aged 18 to state pension age were surveyed for the report.