Saving for retirement
By Tom McPhail | 04 Sep, 2008
According to the Inland Revenue (or HMRC as they are now known) the number of people saving into a Personal Pension has fallen by almost a million in the past year, down to just over 7 million people. This is a pretty substantial drop-off in such a short space of time. It is also interesting to note that the household savings ratio – basically the amount we save every month - is down to 1.1%, which is the lowest it has been since the 1950s (for comparison purposes, it has been declining steadily from a peak of 10.7% in 1993).
People tend to save when times are uncertain, such as in a recession, and to spend when times are good, such as the boom time we have enjoyed for the past few years. The problem is that even the current Chancellor Alistair Darling now acknowledges that the economy is heading for recession, yet so far this slowdown in the economy has had little apparent impact on our propensity to save money.
Set against a back-drop of rising life expectancy and costs of retirement provision, it appears that a widespread shift in attitudes to saving is now overdue.
