Pension saving has now become more of a priority for people than ever before. According to a recent report made by Nest, the workplace pension scheme, people now place more importance on saving towards retirement than they did 3-4 years ago. In 2011, pension saving came seventh on the list of things people would spend their spare cash on, behind purchasing clothes and socialising.
Nowadays though, only holidays and saving for a rainy day beats pension funds in the same list. In this research, 55% of people prioritised holidaying, while 45% would save for a rainy day and 40% mentioned pension saving.
Here is the full list of what people said they would spend their spare cash on this time around, compared with that they responded with in 2011:
1. Holidays (2011: Holidays)
2. Rainy day (2011: Home improvements)
3. Retirement (2011: Socialising)
4. Home improvements (2011: Rainy day)
5. Investment (2011: Motoring)
6. Clearing Debts (2011: Shoes and clothes)
7. Mortgage payment (2011: Retirement)
8. New home (2011: Mortgage repayment)
9. Socialising (2011: New home)
10. Shoes and cothes (2011: Children)
Work Place Pensions
Over 5 million employees have already been enrolled automatically onto the Government scheme, Nest, which aims to tackle fears that people generally have a longer life expectancy than ever before, yet aren’t putting aside enough money for their retirement. Pension shake-ups are also aiming to give people confidence in saving and provide them the freedom to do what they want with their cash. So far an expected 9/10 rate of people are opting to stay in the scheme once placed. People who opted out will be re-enrolled three years later and many people are warming up to the idea too. A staggering 41% of people have said they will stay in next year, compared with 19% in 2013.
From April onwards, people over 50 will be able to choose how they access their pension pots, meaning they will be able to take it all in one go or in a series of installments. The findings of this report suggest that these reforms are encouraging people to save more money into their pension.
Pension freedoms mean that people will be carefully considering their investment options for the future, and with more alternatives than ever, people are looking beyond traditional saving routes.
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