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.
