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Britons 'face pensions shortfall'

Thursday July 15th 2010

Four out of ten people are not saving enough to support themselves in retirement, an insurance trade body has warned.

More needs to be done to encourage people to save enough money to support themselves when they stop work, the Association of British Insurers (ABI) said.

Vast numbers of Britons will not have enough money to enjoy a comfortable retirement, especially if they fall ill or unexpectedly lost their job, though this problem could be alleviated with income protection insurance.

The ABI has called on the Government and the industry to take a "golden opportunity" that currently exists to instil good savings habits, because consumers have become wary of debt during the economic downturn.

It is calling for employers to make it as easy as possible for staff to join company pension schemes, while it wants there to be no significant delays in the introduction of auto-enrolment into company pensions in 2012.

The group is also calling for simplified advice on pension saving to be available to consumers, as well as honest communication to help tackle people's lack of understanding about retirement saving.

Maggie Craig, the ABI's director of life and savings, said: "We all know that many people in the UK are not saving enough towards their retirement.

"Now is the time for action to tackle under-saving rather than further analysis of the problem.

"It is vital that the Government communicates honestly with people, explaining exactly why people need to save more and giving individuals a target to aim for."

Copyright © Press Association 2010

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