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Members’ biggest pension regret is ‘not saving early enough’

By March 29, 2018 October 22nd, 2020 No Comments

According to recent research by Aegon, more than half of workers wish they had started to save for a pension earlier or regret having taken a break from saving.

The study, conducted in February, consulted 657 working adults over the age of 18 and 227 retired people. 14% of workers said their biggest regret was not making a financial plan for their pension.

Other responses included 12% who said they wished they had taken the opportunity to be more engaged with their pension, joined a scheme or took more interest in the pension funds available to them – this was particularly true in the case of women (17% as opposed to 11% of men). 38% of those who had already retired said their biggest regret was putting off making a savings decision, followed by 18% who said it was down to poor planning. Respondents also expressed regret as to how they had used their pension pot, including:

  • accessing a tax-free lump sum when they didn’t need it
  • taking too much income too soon from their drawdown policy
  • buying an annuity
  • not buying an inflation-linked annuity

By contrast, 42% of those surveyed said the best savings decision they had made was joining their workplace pension or saving into a personal pension. This was true for under a quarter of men and just under a fifth of women.

With the state pension being unable to provide an adequate income for most people, it’s becoming increasingly important that individuals don’t delay saving into a pension scheme. As Aegon Pensions Director, Steve Cameron, puts it:

“For many of us, it’s the most important saving pot we’ll ever have, so you want to give yourself the best chance of building it up over as a long a period as possible. By starting to save for retirement as early as possible, with time on your side, you have a better chance to avoid future regrets.”

It’s all too easy to think retirement is a long way off and put off making any decisions about pensions until ’next year…’ After all, there can always seem a more pressing need for disposable cash. The research, however, gives a clear message that many people wish they had taken responsibility for their financial future earlier.

At Creative, we work with a wide range of employers and employees to provide them with innovative and tax-effective pension schemes that suit their particular needs. If you’d like advice on how to make the most of your workplace pension, please contact one of our consultants here.