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Future pensioners face £100-a-week shortfall for not saving enough

As featured in the Daily Express with comment from Rory Stuart, Wealth Planner

A future generation of pensioners face a £100-a-week shortfall in their expected pension because they are not saving enough.

The typical worker wants £409 per week to pay the bills in retirement, but the amount of money they are salting away only qualifies them for £312 a week.

And some areas of the UK are less prepared than others for the financial realities of old age, according to the first Retirement Savings Map produced.

Worryingly, more than half of working adults living in the East Midlands, East of England and South West are not saving into a pension.

Meanwhile, based on the saving habits of 18,000 people across England and Scotland, the map shows residents of the North East, Scotland and the North West are the most likely to enjoy a financially comfortable retirement.

But although workers are using a mixture of methods to save for their retirement, with property, investments and private and workplace pension schemes among the most popular, pension experts warned they were simply not putting enough money and many workers are not starting to save early enough.

Andy Briggs, group chief executive at pension specialists Friends Life, said: "It's encouraging to see areas of the UK where savers are actively managing their finances for their future.

"Acting today means these people are best positioned to secure the future they want in retirement.

"But there are worrying areas of financial deficit where a combination of a lack of awareness, lack of planning and soaring living costs mean a future situation of income shortfall.

"The average total amount of retirement savings is not sufficient once living and housing costs have been factored in, with people facing an expected financial shortfall of £96.67 per week.

"Our map shows only 58 per cent of workers with some form of pension and only 23 per cent of them save the maximum amount they can afford."

In the South West and North East, residents have the smallest shortfall between their likely income and their expected housing and living costs in retirement.

However, the East of England and Greater London are the least prepared and can expect the greatest financial shortfall in retirement.

On average, those in the East of England face an income shortfall of £105.38 per week and Greater London a shortfall of £123.85 per week.

The difference in attitude to retirement savings also varies by city.

People living in Edinburgh are the most proactive in pension saving and those in Bristol and Sheffield are the most prepared for their expected income and spending habits in later years.

But Birmingham residents face one of the greatest financial shortfalls of all the UK cities as they save the least money for retirement.

Londoners, who are the second least likely to save money for retirement, also face the highest living costs at £228 per week, which may mean they focus on day-to-day spending pushing retirement savings down the list of priorities

Rory Stuart, Wealth Planner at Sanlam, said: "With people living longer than ever before, retirement can actually last more than 30 years in many people's lives.

"I am deeply concerned that people face an income shortfall of nearly £100 per week for such a long period of time.

"This clearly demonstrates the need to start saving for the long-term future as early as possible, and for people to ensure they factor in the cost of how they actually want to live in retirement - not leaving themselves short for life's more enjoyable activities, such as going out and taking part on hobbies.

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