Pensions gap continues as Britons fail to save

Over 7 million people in the UK are still not putting aside enough money for their pension.

10:13 02 November 2004

Over 7 million people in the UK are still not putting aside enough money for their pension.

A report compiled by the Association of British Insurers has found that 7.4 million employees were falling an estimated 27 billion short of preparing for old age, even though there has been an increase in the proportion of people who accept it is their responsibility to do so.

Joanne Segars, ABI's head of pensions, said: "These findings will confound those who argue that the public does not accept the severity of the pensions challenge or is unwilling to face the consequences."

Nonetheless, despite 42 per cent now admitting it is up to them to put money aside, millions were not doing so.

One problem, the ABI suggests, is the reliance by the government on the current means tested pensioner's credit.

ABI chairman Richard Harvey is expected to tell a conference on the issue: "People simply do not know whether they are pouring their hard-earned cash down the drain by saving in a private pension because, by the time they get to retirement, they would be no better off [than someone] . . . who got means-tested benefits."

The findings are added to those of the Pensions Commission which reported last month that pensions contributions from employers were also falling short of the predicted need by as much as 57 billion.