Savers still recognise the importance of long-term planning
Britain’s cost-of-living crunch has hit the country hard, with inflation at its highest level in three decades, petrol prices spiralling, retail price increases rising to their highest levels in ten years and, most recently, Ofgem announcing a 54% price hike in energy bills affecting 22 million households.
Chancellor Rishi Sunak has been forced to announce an emergency £350 of support per household to help with the cost of heating. As a result, almost half (47%) of those not retired say that they cannot afford to save right now due to the rising costs of everyday living, a new survey has revealed[1].
Immediate
future
The
news
comes
following
widespread
reports
of many
UK
households
struggling
to make
ends
meet
following
higher
inflationary
pressures
–
sending
everyday
bills
soaring
– as the
country
tries to
recover
from the
effects
of the
COVID-19
pandemic.
Yet despite the concern about saving for the immediate future, savers are still recognising the importance of long-term planning and having a suitable pension in place for when it comes to retirement.
Relatively
comfortable
The
survey –
which
took
place at
the
start of
this
year –
also
found
that
around a
third of
people
with a
pension
said
that
they
spent
some of
their
time
over
Christmas
reviewing
their
finances,
including
their
pension
(31%).
This was
especially
true for
those
aged
18-34
years
old
(41%)
compared
with
those
aged 55+
(24%).
Overall, just 5% of Britons describe themselves as being ‘very comfortable’ financially. Two in five (39%) are relatively comfortable, while a third (34%) say they can normally cover essential costs but don’t often have money for luxuries. One in seven (14%) say they can only just afford their costs and struggle to make ends meet, and 3% say they cannot afford their costs at all and often have to go without essentials, like food and heating.
Fundamental
misunderstandings
Around
a third
(32%) of
those
surveyed
said
they
could
afford
to
contribute
more to
their
pensions
now in
order to
boost
their
retirement
income.
But
while
savers
are
seeing
the
value of
pensions,
the
survey
discovered
that
there
remains
a number
of key
fundamental
misunderstandings
by
savers
about
their
pensions,
with
many
unsure
how
their
contributions
were
being
invested
on their
behalf.
The survey also revealed that only a third of people know the minimum contribution rate that people make via Automatic Enrolment. Additionally, around two-fifths (39%) are not sure if the government gives tax relief on their pension contributions and around a third (31%) are unsure if their pension savings are invested in stocks, bonds or other investments.
Source
data:
[1]
Pensions
and
Lifetime
Savings
Association
(PLSA)
research
conducted
by
Yonder
Data
Solutions
from
10/01/22
to
11/01/22
with
a
nationally
representative
sample
of
2,093
adults
[2]
https://yougov.co.uk/topics/politics/articles-reports/2022/02/04/cost-living-crisis-four-ten-britons-expect-their-h
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