Facing up early to the growing mid-life financial crisis “Making up is hard to do”02 September 2016 Back to results
- 93% of those aged 45 to 54 face barriers to saving towards retirement
- Mortgage and family costs make saving challenging throughout working years
- Even in typical pre-retirement years, just 12% say they have no barriers to saving
- Those who start saving £80 per month at 25 could be £180,000 better off in retirement than those who start at 45
New research from Aegon finds that 93% of those aged 45 to 54 say they face barriers to saving, or saving more, towards retirement.
With peoples’ late 40s and early 50s often said to be both the peak earning years* and the key time to catch up on retirement saving, it’s concerning that amongst 45 to 54 year olds, 9 out of 10 say they face barriers to saving towards retirement.
The most commonly cited reasons for not saving are the cost of living (63%) or insufficient income (39%). However, more specifically 36% of people say mortgage or loan repayments, followed by the costs associated with family (32%) are the main barriers, leaving little money left over to save.
Even at ages 55 to 60, just 12% of people said there was no barrier to them saving with over a quarter (27%) saying mortgage or loan costs were a major barrier, while almost one in five (19%) mentioned the costs associated with family. This highlights a generational shift towards mortgage and family commitments lasting much later into working life.
The barriers were even greater for women with only 9% of women, compared to 15% of men aged over 45 saying there were no barriers towards them saving more.
Steven Cameron, Pension Director at Aegon said:
“Nowadays, whatever your age, you’re likely to face barriers to saving or saving more for your retirement. For those in their 20s and 30s, it may be tempting to put off retirement saving, hoping to become free of pressing financial commitments, but that day may never come, with mortgage repayments and family financing no longer just for the under 45s.
“Escalating property prices mean people are taking on larger mortgages which won’t be repaid until later ages. We’ve seen some mortgage providers** increase the age at which a mortgage can be repaid to 80 or later. People are also starting families later, and increasing tuition fees coupled with a challenging employment environment for younger people mean parents often face supporting their children for longer than previous generations.