SIX in ten Britons have no financial plan for their retirement, fresh research revealed today, with experts blaming this lack of preparation on a “culture of dependency”.
The UK is faced with an “Ostrich Generation” with 17 per cent of people admitting they have no idea where their retirement income will come from, and a further one in five expecting to rely on the state.
Despite their lack of savings and increasing life expectancy, many expect to semi-retire in their mid-50s, and stop working altogether at 62.
This dearth of planning contrasts with upcoming economies in the East, where a class of “prosperous pensioners” is emerging, according to the international survey by HSBC.
People in emerging economies are also prepared to work longer into their retirements, the report said,
“Unless Westerners take a leaf from the book of their Asian peers, and start to be accountable for their own futures, sadly many will find their fears of financial hardship in later life come true,” said HSBC’s David Wells.
Almost half (49 per cent) of Britons now expect to be worse off in retirement than their parents, as demographic changes kick in.
In India, conversely, just one in 10 people expect to be worse off than the previous generation.
Those Britons with savings plans have accumulated on average £123,000 in investments for retirement, compared to the average UK household of £53,000. Non-planners have accumulated just £28,000.
Over three quarters of Chinese people have a plan for retirement, compared to just 30 per cent in France, where government “is the historic provider”, the report said.
“In the West we have created welfare states that penalise work and saving,” said Philip Booth of the Institute for Economic Affairs. “At the same time, past generations have promised themselves pensions to be paid from the taxes of future generations.”
“The report suggests that Britons currently have a culture of dependency on the state, which is a false economy,” added Barbara Thomas, Lady Judge CBE and chairman of the Pension Protection Fund. “People have to take greater personal responsibility for their retirement and rely less on the state, by planning more effectively and saving more for themselves.”