Savings shortfall forces people to put dreams on hold

22 Nov, 2016

New research released today by Zurich shows that nearly half of UK adults say that a lack of savings is stopping them from achieving life goals now.

Based on a survey of over 2,000 UK consumers, the study is a benchmark of how financially confident people are they will be able to fulfill their aspirations for life now and in the future.

The study, which aims to highlight the savings gap in the UK, found that millennials in particular believe a lack of savings stops them from realising their current goals.

Three in five of 18-24-year-olds and half of 25-34-year-olds said lack of savings prevents them from realising goals such as starting a family or travelling the world. This compares to just 33% of those aged 55 or over.

Furthermore, almost three quarters (72%) of those under 65 said they have goals they want to achieve when aged 65 or over, such as travelling more often or for longer periods, taking up new hobbies or being in a position to financially support their own children, grandchildren or stepchildren.

Despite recognition of the importance of saving in achieving aspirations, people under the age of 65 are not actively saving for at 65 and over. A quarter of those who are yet to retire do not have either a private or workplace pension while nearly one fifth (17%) have no savings.

While over half of those pre-retirement hold private or workplace pensions, of those only one in six said they felt confident they knew how much they should be saving into their pension every month to comfortably afford the standard of living they expect from their retirement. Furthermore, 26% stated they had no workplace or private pension provision in place at all.

Anne Torry, of Zurich UK Life, commented: “It is positive that people are so optimistic about their long term future and have clear goals they want to achieve after the age of 65, from travelling the world to starting a new hobby or financially supporting loved ones. Yet, when it comes to realising goals, whether in the long or immediate term, money is a clear brake on ambition with a lack of savings fundamental to realising aspirations. Despite realising this, our research shows just half of non-retired people have pension provision. This simply will not be enough to support the aspirations that people have.

In a low interest rate environment, a professional adviser can also help to create a plan and make the most of savings. The earlier action is taken, the more likely it is that your savings will be sufficient to realise your aspirations today and in the future.”