'Under-saving' for retirement

Marta Phillips from the Pensions Advisory Service has told Daybreak that getting to retirement age is the "one thing that is certain".

She said: "If you live long enough you will stop working and you will need money to live on."

"People forget sometimes," she added. "If you don't participate [in a company's retirement scheme], you are actually giving up part of your salary package because if you don't put your money in the employer doesn't put his money in and the tax man doesn't give you the tax back."

Pensions Minister Steve Webb said the Government is aware that people are not saving enough for their retirement.

He added: "Only 30% of private sector workers are members of a pensions scheme and this must change.

"We have introduced automatic enrolment to help take the hassle out of saving and opened it up to those aged 22 and over to ensure the habit of saving starts early," he said.

"We are restoring clarity to the state pension so people will know exactly what they will get in retirement and how much they need to save on top to achieve the kind of lifestyle they want in the future."

One fifth of men and women are saving nothing at all for their retirement, and insurance company has warned, with more than a third "under-saving". The report found:

• People were seen as preparing adequately were saving at least 12% of their income, or expecting their main retirement pot to come from a pension which offers a guaranteed level of income

• People who were saving less were likely to see their living standards drop sharply after retirement
• Someone retiring aged in their mid-60s faced receiving less than half the amount of money they would feel comfortable living on in their old age

• The typical level of income people felt they would need in retirement was £25,200, but the report said most would end up living on £11,400 a year

Source: Scottish Widows

The number of people saving for their retirement has fallen to its lowest levels in the last nine years, a report has warned.

Scottish Widows said less than half (45%) of those surveyed were making adequate provision, marking a new low since research started in 2005.

The organisation said there was a widening retirement savings gender gap, with 40% of women putting enough by compared with 49% of men.

The gap has come from a drop in the portion of women who were preparing adequately, from 42% last year, it said.