Findings from a study published in September by Aviva, in conjunction with accountants Deloitte, are a wake-up call for individuals and governments across Europe. The study concluded that the UK has the largest pensions gap per person in the whole of Europe and UK adults now need to save an average of £10,300 every year to catch up. Europe’s annual pensions gap now stands at £1.6 trillion.
The UK savings shortfall of £10,300 a year is an average based on the 31 million UK adults who are due to retire between 2011 and 2051.
Aviva warns that the problem is more acute for older people who have less time to top up their savings, especially if they intend to retire at age 65. It could also particularly affect those on lower incomes, for whom setting aside money may be more difficult.
The National Association of Pension Funds commented that ‘under-saving is a live and growing issue that will impact on more and more people as the UK ages’. Investing from an early age, even a small amount, can make a big difference in closing the gap.