The number of people who are saving enough towards their retirement has fallen by nearly ten per cent during the past year despite all the media coverage pensions have received, a report showed yesterday.
Just 46 per cent of workers are currently making adequate provisions for when they retire, down from 55 per cent in 2005, according to Scottish Widows. There has also been a fall in the proportion of income being saved by people who are not members of a final salary pension scheme.
The group found that employees who are not members of one of these schemes are setting aside an average of just 5.8 per cent of their pay, down from 7.9 per cent last year and less than half the 12 per cent they should be saving.
Overall, the research found that four out of five people who were not members of a final salary pension were not saving adequately for their retirement, while 28 per cent were not saving anything at all, up from 17 per cent in 2005.
The number who admit they do not know what their main source of income will be in retirement has also nearly doubled from 12 per cent last year to 23 per cent now.
The problem is worst among women, with one third failing to set any money aside for when they retire, compared with just a quarter of men. Parents with children under five are also more likely to be non-savers at 36 per cent, as are self-employed people at 38 per cent.
Debt was also cited as a major reason why people were not saving, with just a quarter of non-savers saying they had no debt, while the average person who was not paying into a pension owed £7,690. By contrast those who were saving adequately were most likely to be men, with two-thirds setting enough aside.
They were also likely to work for a large employer or in the public sector, and have been with their current employer for more than ten years.
Higher earners were also more likely to be paying into a pension, with people who were making adequate provisions earning an average of £27,541, £10,000 more than the £17,719 that the average non-saver earns.
Only one in three people said they would be happy to continue working beyond the age of 65, although a third who are not currently saving said they would be willing to work beyond 70.
Ian Naismith, head of pensions market development at Scottish Widows, said: "It is essential that the decline in retirement savings is halted very soon. If people wait until the Government's reforms come into effect in 2012, it will be a case of too little, too late."