Thirty-eight per cent not investing for retirement
Shock new research by YouGov for TD Direct Investing shows that nearly four in 10 British adults have no plans to make any investment for their retirement over the next year.
The 38% of Britons not actively boosting their pension pots is at odds with attitudes in other developed economies, particularly North America and Asia, where attention to such financial forward planning is a high priority for many.
Indeed, while more than half (53%) of respondents to a recent US Gallup poll reported their plans to rely on stocks and shares investment to fund retirement, in the form of individual stock investments or stock mutual fund investments, just 15% of Brits would contemplate including individual equity investments in their pension portfolio.
This is despite the fact that a Stocks and Shares ISA is potentially more likely to generate higher returns than savings accounts or Cash ISAs.
The perceived efficiencies of self-managed investment products are also better appreciated in Japan where, according to a 2013 survey by Ageon, a third (33%) of retirees purchased one to generate income.
The new findings come at a time when British savers are battling static interest rates and uncertainty amid a gradual rebalancing in the economy.
Despite these drivers and consumers reporting that they may consider Stocks and Shares ISAs over Cash ISAs (21%), obstacles to doing so included a lack of understanding of the products (seven per cent) and ‘too many providers of products to choose from’ (10%).
TD Direct Investing CEO, Stuart Welch, said: “Clearly, Britain lags behind the US and Japan in old age planning, even when experiencing a low interest environment – a time when people should be acquainting themselves with alternative, more efficient investment and savings routes.
“With wages falling in real terms and Bank of England governor, Mark Carney advocating ‘low rates for longer’, we are actively communicating to tomorrow’s pensioner’s the investment opportunities available that might help them enjoy a better standard of living when life slows down.”
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