Mortgage repayments are stopping one third of UK workers to adequately prepare for retirement, HSBC says.
The bank’s latest report shows that 30 per cent of working adults across the country say their mortgages are preventing them for making regular or any retirement savings.
The proportion of people who stopped or cut back on saving up for retirement since the start of the economic crisis is 41 per cent, HSCB stressed.
What is an even bigger reason for concern is the fact that over half (51 per cent) of UK workers admit they just do not have the means to set money aside for retirement.
Many Britons are aware they would have to live on considerably less when they stop working. Two in five, or 40 per cent, of them say their living standard will be worse during retirement and almost half, or 46 per cent, are preparing to reduce their everyday spending.
The proportion of Britons concerned they will not have enough to live on after they stop working is 59 per cent.
Pensioners today say the necessary monthly amount for a household to live comfortably during retirement is £35,000.
HSBC, which surveyed 16,000 people worldwide for its latest Future of Retirement report, also asked people about good ways to save for retirement. Supporting yourself through second homes and buy-to-let properties was the second best option for savings, with 60 per cent of the workers supporting it. Top savings option, according to 65 per cent of workers, are corporate pension schemes. The majority of retired people (80 per cent) also say the best way to save up for pension years is to join a scheme. Having second property or a buy-to-let arrangement is second-best option for most of them (61 per cent) as well.
HSBC said its research has identified four actions that individuals can take to improve their financial well-being in retirement.
1. Start saving early: Retirement can seem a long way off when you are young. Nevertheless, it is crucial to start making retirement plans as early as you can.
2. Know how much you need: Start thinking about the kind of lifestyle you want when you retire and how much you will need to fund it.
3. Refill the pot: It is easy for retirement savings to suffer when times are hard. With the worst of the global economic downturn behind us, start looking for advice on how to replenish any depleted funds in your retirement pot.
4. Expect the unexpected: Unforeseen life events can damage your retirement savings. No one can see into the future, but do consider what could happen and how this will impact your financial planning.
