UK workers are trailing behind some of their European peers when it comes to saving for retirement according to a new report from M&G Wealth.
M&G Wealth’s study explores the biggest financial risks people face in retirement across the UK, France, Italy, Germany and Spain. The report also reveals how this is compounded for women.
A quarter (24%) of Brits surveyed say they are saving as much as they can every month, but this is lower than other European countries, including Spain where (31%) of those surveyed are doing so. UK respondents stated affordability as the main barrier to saving more with (33%) of respondents unable to save more which is significantly higher than those in Italy (22%),Germany (27%), and Spain (27%).
At a time when many UK households are grappling with the cost-of-living, the study shows the long-term impact of the crisis with almost a fifth, (18%), stating they will work beyond state pension age. And this is a bigger concern for female workers in the UK with 21% of women stating this, compared to just 15% of men.
When it comes to actively saving, 27% of men in the UK have set up an ISA to save for retirement compared to only 18% of women. Even more concerning, just 9% of UK women surveyed have set up a private pension which is almost half the number of men (17%).
This doesn’t seem to be an isolated issue, only 11% of women in the UK had increased their workplace contributions compared to 16% of men, and this trend of women lagging men with workplace contributions is echoed in other European countries. In France and Italy, men are actively putting money into their workplace pension, whilst only half of women do so2.
Despite the barriers to topping up pensions, the report showed Brits and Spaniards are the most likely of the nations surveyed to seek financial advice, with 20% and 23% doing so respectively.
Kirsty Anderson, pensions expert at M&G Wealth, said: “Balancing saving for the future against short-term spending needs is always a challenge and, with rising inflation continuing to diminish people’s savings and spending power, it’s only getting tougher.
“The reality is that many in the UK are telling us they simply can’t afford to save more for retirement but, even when cash is tight, there are some simple things you can do to help secure your financial future.
“These include topping up, your workplace pension, if you can. Even a small amount each month will make a difference and your employer may match your contributions.
“It’s also worth taking a look at where your pension savings are held. If you’ve got a number of small pensions from previous workplaces, you might be able to bring them together to make them work harder for you.
“And something that still tends to affect women disproportionally is making sure, if you can, that you keep contributing to your pension when you go on any career breaks, perhaps to look after children or elderly relatives, or that you top it up when you return to work.
“Regularly reviewing your savings has never been more important and talking to a professional adviser to learn more about your pension and, crucially, your projected retirement income can help inform and shape broader life decisions.”