Third of people say their retirement savings are a cause of ‘significant stress’

A third of people say their retirement savings are a cause of ‘significant stress’ according to new research by NerdWallet,

The research found that 34% consider their retirement finances to be a source of significant stress, with only 37% saying they have a clear retirement savings strategy.

On average, employees said they save £298 into their pension each month. A quarter (24%) of savers have reduced their pension contributions since the start of the Covid-19 pandemic in early 2020.

More than half (52%) of full-time workers worry that they will not be able to save enough money to maintain their current lifestyle in retirement. Almost one in 10 (9%) doubt they will ever be able to fully retire, despite wanting to.

Richard Eagling, Senior Pensions Expert at NerdWallet, said “The Covid-19 pandemic has hit pension contributions hard. Sudden changes in people’s financial positions, as well as general economic uncertainty, have forced many to divert their attention away from retirement planning and prioritise more immediate commitments.”

“While understandable, reducing pension contributions could cause retirement issues in the long run. The feeling of not having saved enough – or being unable to do so – is already a source of major stress for many workers, so reducing pension contributions is likely to intensify these worries. It is vital that people establish a very clear retirement plan. Calculations can be made to estimate how much, factoring in inflation, people will likely need to contribute to their pension each month if they are to achieve the retirement income they want; this is often a good starting point.”

“At all times, pension savers must remain calm and avoid making any rash decisions when it comes to their pension. For those who are unsure of how to approach retirement planning, it is important to use the support available, such as free guidance from Pension Wise or independent financial advice. Comparing pension providers can also help individuals find the right pension for them. Taking these steps could  help people better understand their financial situation and get on track to achieve a comfortable retirement.”