A report written by insurance company LV spells worrying times ahead for the UK’s pensioners, as 20 per cent of Britons coming up to retirement age have reduced their pension savings by an average of £342 per month.
The insurers have recently produced their annual State of Retirement Report which has shown that workers that are within five years of retiring have slashed their yearly contributions by £4,104. This equates to a total of £11 billion.
Private sector workers have made the most drastic cuts to their pension savings, putting £434 less a month towards their pensions than the previous year. Public sector workers, despite the cuts to the civil service, have reduced their savings by £120 less with an average of a £321 reduction each month.
The report has found that 1 in 6 people currently in their early sixties do not want to work beyond the age of 65, but may now find that they will have to because they will have saved insufficient funds for their retirements. A staggering third of this age group are also feeling extra monetary burdens as they are still financially supporting their children.
More worrying, is the fact that almost three quarters of pensioners are not aware of key retirement issues, for example: the fact that they are required to buy an annuity at 75. 25% of retirees did not know that the pension credits are going to be scrapped in 2015 and a flat rate pension brought in to replace them, although most of the people that were aware of this change fully supported the new scheme.
LV’s Head of Pension, Ray Chinn said: “The Coalition Government has proposed and made a significant amount of changes to our pensions’ system which is yet to register with many people in or nearing retirement.
“Despite these changes, there is still no indication that any will act as an incentive to get people saving, and saving more, for their retirement years. In fact, our report has found quite the opposite, as a significant number are still cutting back on what they save each month and by a greater sum as time goes by.”
This news comes on top of the recent news that 70% of breadwinners do not contribute into a work’s pension scheme and 50% of Britons expect to be worse off during retirement than their parents.


