Malcolm McLean, consultant at Barnett Waddingham, comments on today’s report from Aviva which suggests that money trumps companionship when it comes to happiness in retirement:
“The message seems to be getting across – for many people through experience – that having enough money to live in some degree of comfort in later life is second only to good health in importance.
“To an extent this sentiment is evident from the initial low levels of opt-outs from the current auto-enrolment programme, which is currently in its early stages. People appear to be becoming more aware of the need to save for their old age and not to rely completely on the Government to provide for them.
“What is less encouraging, however, is the general lack of understanding of how a pension plan works, when and how to start one and how much needs to be paid in to secure an appropriate level of income in retirement.
“There is no doubt that we are a long way off resolving the demographic time bomb. Finding the money to pay into a pension is still a challenge and many people are continuing to sleep walk into a financially uncertain old age.
“We must continue to demystify pensions as a savings vehicle, to make them simpler and more understandable to ordinary people and ensure that they deliver better outcomes than some have achieved in the past. Auto-enrolment is a start, but will require much larger minimum contribution levels sooner rather than later if it is to succeed in the years ahead.
“In the meantime, the findings of the Aviva Report give some cause for optimism in terms of attitude and willingness to save, assuming financial pressures allow. As the Beatles observed back in the sixties “Money can’t buy you love”, but what it might be able to do is give you contentment and a much better life in your later years.”
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