We are saving less into company pensions than we have for a generation - and fewer of us are bothering to put any money aside into the schemes at all.
We're facing a pensions meltdown. So how did we get to this point, and how do we get out?
Saving plungesFigures from the Office for National Statistics found that just 8.3 million people were saving into a workplace pension last year, and the majority of them were public sector employees. Just 3 million people were saving into a company pension.
A means a massive six in seven people choose not to join their company pension. It puts company pension scheme membership at its lowest since 1956.
Huge price to payOn the one hand, the experts are stunned. They can't get over the fact that we are leaving up to three decades of our lives in the hands of the state. They cannot believe that we are abandoning our chance for a comfortable retirement, and leaving ourselves with no choice but to work until we drop, or live off a pittance.
Why we're not savingHowever, they are overlooking the basic facts of life at the moment. The cost of bills and the endless quest to scrape by means many of us feel we cannot afford to put a penny aside for the future. We're already facing the prospect of putting the gas bill on our credit card, so how are we meant to salt money away somewhere utterly inaccessible at the same time?
Why we need to go the extra mileHowever, the experts have a point. There are two over-riding reasons why we have to bite the bullet and get ourselves into a scheme as soon as possible. The first is that by turning away from companies were are turning down free money. Some companies pay into the scheme when you join. They may, for example, match every penny you pay into the scheme, or match the first chunk at least. In addition, the government will top it up by 20% or 40% - depending on your tax rate - which is often a hefty chunk of free cash.
Second, you may feel cash-strapped now, but if you rely on the state in retirement, then this period is going to feel positively luxurious. If your current income isn't enough to meet the rising cost of bills, try doing it on a state pension, and you'll realise the problems we are storing up for our future.
We're between a rock and a hard place. We cannot afford to put money into the pension, but then again we cannot afford not to. The clear advice is to make any sacrifices now that we need to in order to protect our retirements. But what do you think? Let us know in the comments.