Millions of mid-life employees are said to be “flying blind into retirement”, unaware of how much pension they will receive… or whether it will be enough to secure a comfortable retirement.
New research from Aviva claims that nine million of those approaching retirement do not know how much they will need to have in their pension pot by the time they plan to retire, while five million do not know how much they have already saved.
Two out of five employees do not have a fix on how much their state pension will be worth, despite the fact that this will constitute a large proportion of many people’s retirement income.
Aviva say that pension freedoms, intended in part to encourage people to take more control of their retirement finances, has simply added to the confusion: some 62% of employees aged over 45 are unaware of what their options are, while 37% do not even know what type of pension scheme they are in.
Lindsey Rix, managing director of savings and retirement at Aviva, says that millions of mid-life employees are “flying blind” towards their retirement.
She says: “Without a clear picture of what they currently have saved or might need to save for a comfortable retirement, our findings show many UK employees are approaching retirement with their eyes closed – with no realistic idea of how near or far they are from their destination.
“As a first step, mid-life employees who are mystified by their pension savings should try to get a clear picture of what they have saved so far and how much of an income this can provide them with over the course of retirement.
“For some, this may be a pleasant surprise, while for others, it could be the wake-up call that’s needed to spur them to take action. People whose pensions are in need of a boost shouldn’t be disheartened, however, as it’s never too late to save.”
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