The scale of hardship in retirement is laid bare by two thirds of retirees worldwide who say they wish they had saved more.
A survey of over 22,000 investors from 30 countries by Schroders found that European investors who most regretted not saving enough were led by Poland at 81%, followed by Spain 76% and Italy 59%.
On average, globally 66% of retired investors wish they had saved more – including 22% who wish they had saved a lot more. Schroders said this trend was prevalent across the 30 countries surveyed and especially in Asia.
Those yet to retire were saving 11.4% of their annual income – but felt they should be saving 13.7%.
Pension savers wanted to retire at, on average, age 60 years old, but realistically expected to retire at 63.
The survey found that the main source of retirement income to be savings and investments.
The top sources of retirement funds were:
- Savings and investments (20%)
- State pension (19%)
- Company pension (18%)
- Personal pension (12%)
Others sources included income from property, money from relatives, part-time jobs, inheritance, and home capital/equity release.
The survey found that 63% of those still working hoped to work part time for an average of 3.4 years before full retirement and 30% wanted to turn their hobby into a source of income in retirement.
Lesley-Ann Morgan, global head of defined contribution and retirement at Schroders, said: “This study shows that even those who are established investors are not putting away enough money.”
The pension savings gap is further compounded, she said, by low interest rates and low returns.
“The most powerful tool available to savers is time. Start saving at an early age and it makes an incredible difference to the eventual size of your retirement pot.
“The miracle of compounding, where you earn returns on your returns, adds up over 30 or 40 years of saving.”
©2017 funds europe
