New research from Phoenix Group, owner of Standard Life, has found that 75% of Scots aged between 40 and 66 — pre-state pension age — feel financially unprepared for retirement.
Around 69% are concerned they will not have enough savings to fund their retirement.
Regional breakdowns around Scotland show wide saving differences, with people in Glasgow reporting the highest level of “under saving.”
Over half (52%) of over 40s in Glasgow say they have under £51,000 in retirement savings, and 20% say they have no retirement savings at all.
Phoenix Group’s research with the Diffley Partnership surveyed almost 2,000 Scots over 40.
Phoenix said that according to the PLSA Retirement Living Standards, adults need a minimum of £300,000 in savings at state pension age to achieve a “moderate” standard of living in retirement – defined as “the ability to access a range of opportunities and choices, and have a sense of financial security.”
Only 8% of Scots say they have savings over £300,000. About 14% say they have no retirement savings at all.
Catherine Foot, Director of Phoenix Insights, Phoenix Group’s longevity think tank, said: “People often have competing priorities when it comes to their money and the cost-of-living pressures in recent years have increased the strain for many.
“However, it will always be important for people to ensure they don’t overlook their long-term savings and take steps to plan for their future retirement income where they can.
“Often just thinking about your future finances can be the hardest step, but a good place to start is to seek guidance from your pension provider if you have one, or free online services such as MoneyHelper.
“Without taking action to plan ahead, people are at risk of sleepwalking into retirement short of enough savings to fund it.
“Not everyone will be able to save more, however, so it’s vital there is an adequate financial safety net from the state to support people in the years prior to and beyond state pension age.”
Gail Izat, Managing Director for Workplace Pensions at Standard Life, part of Phoenix Group, said: “This research highlights the worrying level of under saving in Scotland and, sadly, we know the situation is similar in the rest of the UK.
“The fact that a fifth of Glaswegians report no private retirement savings has wider societal implications, particularly as the state pension by itself falls short of even the PLSA’s minimum standard of living in retirement.
“It’s vital that we extend pensions auto-enrolment to bring more people into the scheme and give those who are already eligible a better chance of securing a decent retirement.
“Last year parliament passed a bill to lower the minimum age to qualify for auto-enrolment from 22 to 18 and abolish the lower earnings limit for contributions.
“We urge the government to implement these changes as quickly as possible. Longer term, increasing minimum auto-enrolment contributions, when the economic conditions allow, is the single biggest lever we can pull to boost savings adequacy.”
Mark Diffley, Founder and Director of the Diffley Partnership, said: “This comprehensive survey reveals that a significant proportion of Scots are unprepared for retirement, with little saved to furnish a decent standard of living in their older years.
“Women, those in lower social grades, and those in more deprived neighbourhoods are particularly vulnerable, approaching retirement age with significantly less saved than their peers.
“Such discouraging findings require decision-makers to take notice and action, to ensure that everyone enters retirement with funds to live comfortably.”