GB Financial Awareness Report

The Royal Liver Assurance in the UK recently commissioned MORI Telephone Surveys (MTS) to carry out research for its Great Britain Financial Awareness Report. This report is designed to help understand attitudes to saving and why some people aren't taking steps towards providing for their financial future.

Almost one in five people have never paid into a pension scheme and a further 16% have previously paid into company or stakeholder schemes in the past but are not currently contributing. When asked why, one third believe they are too young to start saving for retirement, and three in 10 say they don't know enough about pensions. Almost a quarter blame a lack of money or low income and 15% say it is the Government's responsibility to provide for their retirement. One in 10 feel pensions are too complicated and two per cent don't trust pension companies.

Looking to the future, just under half of those questioned in the survey are worried about having a decent standard of living when they retire but almost a third (31%) say they aren't very worried and one in 10 (21%) are not worried at all. The 26 to 35 year olds are the most concerned with half (52%) admitting they are worried about their standard of living in retirement.

As far as the age of retirement is concerned, two thirds plan to retire before they reach 65, and more than eight in 10 (86%) of 18 to 25 year olds want to retire by the time they reach 65. More than a third (36%) - the highest proportion - are planning to retire between the ages of 60 and 64. Just one in 10 (nine per cent) plan to continue working after the age of 65.

When asked to specify the level of annual income (equivalent to today's money) people questioned felt they would need to retire on, a quarter say between £10,000 and £14,999 and slightly less (23%) feel they would need between £15,000 and £19,999 a year. More than one in 10 (14%) opted for the higher figure of between £20,000 and £24,999, and almost one in 10 feel they would only need between £500 to £9999 a year to live on in retirement.

As far as regular savings are concerned, three in 10 people save nothing at all on a monthly basis, while a third (32%) are putting aside more than £100 out of their monthly pay. Of those who are saving, more than two in five say it is for a rainy day (43%) with slightly fewer saying it is for a holiday (39%). One third are putting money aside for their retirement, a quarter (26%) say it is money is for children/grandchildren and one in five (22%) for home improvements. Others were saving for a car (12%) or for a deposit for a house (nine per cent).

Almost two thirds of those questioned feel the financial services industry should do more to help people understand their products. More than seven in 10 (72%) feel products are not explained simply enough and that there is too much jargon. Two in five (42%) complain of very little face-to-face contact to help them understand the available options but more than a third (37%) feel the industry is already doing enough.

Research among young adults (aged 18-25) shows more than two in five (46%) have never paid into a pension scheme and three in 10 (29%) save nothing on a monthly basis. This is despite the fact that more than four in five (85%) know they are unlikely to receive a state pension when they retire. Over half are worried about their standard of living during retirement but three quarters (73%) confess they simply prefer to spend their money. Three in five (61%) of those without pensions believe they are too young to start saving for retirement, and two in five (43%) admit they don't know enough about pensions.

However, younger people claim this lack of understanding in pensions is not just down to lack of interest. More than three in five (63%) feel banks, buildings societies and financial services companies should do more to help people understand their products, and seven in 10 say things are not explained to them simply and that there is too much jargon. Over half say there is little face-to-face contact to help them understand the available options.

The GB Financial Awareness Report was compiled from data collected by a MORI Telephone Surveys of 500 GB residents aged between 18 to 64 in June 2002.

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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