Many Britons Struggling To Afford To Save

Saving for later life is currently out of reach for many Britons, it has been said.

People are becoming increasingly aware of the importance of storing money in savings accounts such as ISAs and fixed rate bonds in order to supplement their income in retirement, an expert has suggested.

In recent times, many analysts have noted that an increasing number of Britons appear to be recognising how vital it is to provide themselves with a financial safety net for after they finish work permanently in the wake of the global economic downturn.

It seems that a lot of people believe a basic state pension will be insufficient for their lifestyles in retirement, which is prompting many to strive to save even though they may also be under pressure to repay debts owed on personal finance options such as credit cards.

However, according to Jasmine Birtles, founder of online resource Money Magpie, while people are definitely now coming to terms with how vital it is to boost their long-term savings, many - particularly among the younger generation - cannot afford to do so.

Ms Birtles explained that the presence of a work pension scheme tends to be the primary influence over whether or not an individual contributes to a retirement fund and noted that some are deciding not to save if such an initiative is optional.

She went on to say that younger people may be more likely to prioritise either paying off debts due to the current high level of interest rates on credit, or putting cash aside to afford a new home as opposed to thinking about their retirement savings.

Last week (June 7th) Scottish Widows released its seventh annual UK Pensions Report, in which it revealed that 73 per cent of Britons are aware that they must take personal responsibility for long-term financial planning.

However, despite this, various factors are preventing many people from acting on this belief.

Meanwhile, Britons will have little choice but to accept the fact that they are going to need to plan ahead further with the use of savings accounts prior to retirement, an expert has said.

Due to the forthcoming alterations in terms of the state pension age, many consumers approaching the time when they will finish work permanently may have been storing cash in personal finance options such as ISAs or fixed rate bonds to boost their funds later in life.

And, according to Tom McPhail, head of pensions research at Hargreaves Lansdown, everybody needs to recognise they must "save a little bit more for retirement" in light of these legislative changes.

Speaking on the BBC Wake Up to Money podcast, Mr McPhail went on to explain that people are going to have to "wait a bit longer before they can begin drawing their pension.

Recently, Martin Bamford of Informed Choice stated that females tend to be "more clued-up" about retirement savings.