Proportion of people saving adequately for retirement ‘highest in 15 years’

Nearly three in five people are saving adequately for their retirement – marking the highest proportion recorded in 15 years, a report has found.

Some 59% of people surveyed in the 15th annual Scottish Widows retirement report were deemed to be saving enough for later life – the highest percentage it has seen.

But more than a fifth (22%) of people think they will never be able to afford to retire.

Scottish Widows generally considers people to be saving adequately for retirement if the equivalent of 12% or more of their income is being put aside.

A year ago, 55% of people were found to be saving adequately.

The report said gradual increases in the minimum contributions allowed into workplace pensions under automatic enrolment appear to have been having a positive impact on people’s savings habits.

But 17% of people are still saving nothing for later life – a proportion unchanged from a year ago.

Those who think they can never retire have an average income of £21,500 a year – significantly below the UK average salary of £27,396.

They are also more likely to have faced a financial emergency such as an unexpected bill or income fall in the past, with 86% having experienced this compared with 67% of people generally.

The report which surveyed more than 5,000 people also found a big fall in the proportion of under-30s who are not saving enough for retirement.

Four in 10 (40%) 22 to 29-year-olds are now saving adequately – up from 30% in 2017.

Peter Glancy, head of policy at Scottish Widows, said: “One in five people say they’ll never be able to retire.

“With no further step-ups in auto-enrolment contributions planned, this is a timely reminder that bold action must be taken to ensure no one has to face the spectre of poverty in their later years.”