Only half of UK employees are on course for an adequate income during retirement, research reveals.
Just 55% of people are saving at the levels they need, falling to 30% if people who are members of final salary pension schemes are excluded, according to a report from financial services company Scottish Widows.
Workers aged over 30 who are not members of final salary schemes save an average of just 9.3% of their income each year, but Scottish Widows estimates they should set aside at least12% to have a satisfactory standard of living during retirement.
The average is boosted by a minority who save about 20% of their income, but one in five people save less than 6% of their pay and 17% of workers set aside no money at all for their old age.
The research found that it was not simply a lack of affordability which prevents people from saving – one in three of those who don’t pay into a pension earn more than £30,000 a year.
It said the barriers to saving were more likely to by psychological than financial.
Among people who earned the same amount, non-savers were more likely to believe a reduction in their spending would seriously affect their standard of living.
Non-savers were also less content with their current lifestyle than savers, more likely to have significant debts, less likely to own their own home and twice as likely to be smokers as savers were.
Ian Naismith, head of pensions market development at Scottish Widows, said: “This report shows that our decision to save or not to save for retirement is highly complicated, perhaps more so than has been considered previously.
“Factors to take into account include not only income, age and levels of understanding, but also individual psychology.”