The UK is heading for a pensions dark age, according to insurance company AXA.
It said that 64% of UK workers are “looking to rely on” the state pension – currently £95.25 for a single person – when they retire, thanks partly to a decline in occupational scheme membership.
One in five 25- to 34-year-olds believe equity in their house will support them in their retirement. But only 7% of 18 to 24-year-olds share this view.
The figures are based on a poll of 2,110 adults carried out on behalf of AXA by pollster YouGov last month.
AXA’s head of savings and pensions policy, Steve Folkard, said: “There has to be a co-ordinated effort to make sure that people are adequately provided for, or we will be faced with a pensions dark age.”
According to the company, the UK state pension is worth 31% of average earnings and trails behind other major developed countries. For example, the Italian state pension, the most generous, is 68% of average earnings. France’s is 51.2%, Germany’s 39.9%, and the US 41.2%.
AXA also cast doubt on whether auto-enrolment, due to start in 2012, will bring millions more people – the Pensions Policy Institute estimate is 10 million – into occupational pension schemes. It believes “there could be a rise of just 800,000 members” contributing to defined contribution schemes.
“The erosion of the once sound company pensions infrastructure in the UK… presents a future government with a massive challenge. Pensioner poverty is set to grow dramatically over the coming years, and current reform measures will take years to implement.”