Posted on: 24th October 2019
77 per cent of adults across the UK have still not set savings targets for. According to Sanlam UK, approximately 40 million citizens have admitted that they either have not or did not set savings targets.
According to Sanlam’s “What’s your number?” report, the UK is struggling to reach their financial goals due to lack of information. The report also found that 55 per cent of adults doubt their ability to save enough money to retire when they want to. What’s more, less than 12 per cent of those below the age of 55 have a target for theirpot.
Despite the high levels of awareness regarding problematic finances, the report revealed that not enough people are addressing their issues. This is reflected with the fact that people are four times as likely to memorise their lottery numbers than their pension pot.
Those aged between 45 and 55 are quite at risk. Despite it being the age group that should be saving the most, only 18 per cent have set goals for retirement. According to Sanlam, this is equal to 8.2 million citizens sleepwalking into retirement, missing out on their final earning years and not realising their ability to meet their retirement goals.
The gender gap
Sanlam’s report also highlights an underlying flaw in attempts to close the gender gap within pension pots. Only 18 per cent of women have set a financial target for when they retire, compared to 29 per cent of men. In other words, 22 million women across the UK do not have a financial target for when they retire.
Failure to launch
Findings from the report reveal that 39 per cent of UK adults do not consider setting targets to have any importance in their financial planning.
However, those under the age of 35 do see the importance of financial planning. 39 per cent view it to be important, compared to the national average of 26 per cent. At the same time, 86 per cent have already set financial targets.
As a result, those under the age of 35 are notably more confident in their ability to achieve what they need when they reach retirement (55 per cent, compared to the national average of 45 per cent).
Jonathan Polin, Sanlam UK CEO, said: “What’s your number? is a simple question, but the answer is often less straight forward. The gap between what people think they need and what they actually require in later life is huge, and sometimes life-changing.
“Despite years of industry effort to turn the tide, engagement with longer term savings, as highlighted in our report, is shockingly low. This suggests that we are about to see a tidal wave of people coming into retirement who will be ill-prepared and severely disappointed when faced with their retirement reality. By taking some very simple steps, setting clear financial goals, and identifying a clear path to get there, this nightmare can be avoided.”
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It has been said often enough that planning for retirement can be made simple with the help of independent financial advice. At Haven IFA, we strive to help individuals reach their goals for retirement. To see how we can help with your financial planning, get in touch.