The review of UK savings, published following the pension reforms which came into effect on Monday, says that despite the changes the nation is unwilling or unable to capitalise on the majority of freedoms now available.
The data outlines how the vast majority of the UK are demotivated or unable to save – with 14.6 million across the UK not saving at all.
The findings in new UK Savings Index incude:
· 89% of the UK population are not prioritising saving towards their retirement
· 29% – equivalent to 14.6 million people – are currently failing to save any money at all
· Twice as many (23%) are prioritising a holiday than are looking to save towards their retirement (11%)
For the research, a nationally representative sample of 2000 consumers was undertaken by pensions consultancy Avacade Future Solutions. Avacade is a UK company specialising in offering free pension reports to customer and then providing them with access to IFAs if they require it. The company is not regulated or authorised by the FCA and does not offer financial advice.
Avacade says that the research shows that UK consumers are steadily progressing into a "national savings and retirement crisis."
The research underlines the motivations behind Britain's savings profile and the financial objectives that assume priority status for UK savers. Weighted by the overriding fact that 14.6 million adults – equivalent to 29% of the nation - are not saving at all, the research reveals a worrying future for households across the country, says the company. Of those from the sample that are saving, twice as many are prioritising a holiday - a single trip - than are preparing for retirement.
Since the economic downturn, savers have struggled to beat inflation, intensifying the challenge of funding a satisfactory retirement, says Avacade.
The research found some gender-based, age-based and regional differences between savings rates. Men and women possess different financial objectives with 12% of men prioritising their retirement, compared to only 9% of women. Female respondents prioritised saving for their children and for a new home.
Young people are the most proactive age group towards savings, with 74% of 18 – 34 year olds putting money away. This drops to 69% for 35 – 55 year olds and 70% for those aged 55 plus. These findings are supported by the Unprepared Britain report that found today's 30-34 year olds made their first pension payment 20 years earlier than those who are now retired (65+).
There is a significant divergence between the saving rates across the UK. In the East of England, 35% of the population are not saving at all compared to 23% in London and 24% in Northern Ireland. As a region, Northern Ireland is the most pension-conscious with one in five (20%) prioritising their retirement. Scotland and the East Midlands score 14% in joint 2nd place.
Lee Lummis, managing director, Avacade Future Solutions, said: "The fact that 89% of the UK population are not prioritising their pension and that 14 million people in the UK are not saving at all calls for immediate industry action to prevent what could be the poorest generation of retirees in our lifetime."