Under-30s not saving enough for retirement

70% of under-30s are not saving enough to reach their ideal retirement income, according to Scottish Widows.

The report found that under-30s make average contributions of £184 a month, including employer contributions. These savings would result in an estimated annual pension of £15,000 – well short of their desired retirement income of £23,000 a year.

The survey of 5,314 adults found the number of people saving enough increased from 46% to 56% since auto-enrolment was introduced in 2012.

Despite the rise, 1 in 5 adults (18%) are still not saving for retirement.

Scottish Widows estimates that in order to achieve the £23,000 annually in retirement, someone aged 25 would need to save £293 each month.

Someone who started saving aged 35 would need to put away £443 a month or £724 for a 45-year-old.

Over-50s would need to put aside £1,445 a month to reach their desired income.

Catherine Stewart, retirement expert at Scottish Widows, said:

“Auto-enrolment may well be lulling people into a false sense of security that they are putting away enough for a comfortable retirement. For many, particularly those only making the minimum contribution that is simply not the case given retirement is looking more expensive, and longer, than ever.”

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