COMMENT
Half Of Us Face Poverty in Retirement

It's my birthday next week, at which point I shall suddenly turn into what the market research company, Mintel, has decided to classify as a 'Grey Consumer' ie: anyone over 45. (As it happens I'm not grey although, admittedly, that's largely thanks to the contents of a bottle I buy regularly from the chemist down the road).

Anyway, I can apparently count myself as fortunate in that I fall into to the one half of the non-retired Grey Consumer category who is contributing to a pension scheme. The other half is not, according to Mintel's research, and they warn that these people are at risk of spending their retirement in poverty.

Amongst those adults who have not yet retired, only around half of 45-54 year olds (52%) and 55-64 year olds (46%) contribute to a pension product.

Unless the remainder are saving in other ways, they're relying entirely on the state system to support them in their old age. Unfortunately, there won't be enough people around to finance it. At the moment there are around 27 pensioners for every 100 people aged 20 to 64. By 2050, the ratio will be 48 to 100. So the responsibility of providing for one's old age is rather more in the hands of the individual than it used to be.

Even among those who are putting money aside for their future, many are simply not saving enough. Although some 60% of non-retired 45-64 year olds make regular, monthly contributions to a pension, savings account or an investment product, as many as 43% of these consumers save less than £100 a month.

Not surprisingly part of the reason for not investing in a pension scheme is distrust. Numerous reports of underperforming pension funds not to mention scandals in the private sector have simply put people off. The recent property boom has also resulted in around 40% of adults aged 45 and over saying that they'd prefer to invest their money in property rather than in any type of savings product, although ISAs aren't discounted.

However, those expecting to depend on their home as a means of retirement income could be in for a rude awakening, particularly if property prices fall. Although home ownership could provide retirement resources for many people, it's not a solution in itself, not least because most people won't own homes of sufficient value to trade down and release enough equity to live on.

If you're one of those who hasn't saved anything for retirement the Association of Consulting Actuaries has come up with some figures regarding how much of your earnings you should start saving right now. Depending on your age when you start, they are:

Age 25: 10-15%
Age 30: 12-17%
Age 35: 15-20%
Age 40: 17-24%
Age 45: 23-30%
Age 50: 32-45%
Age 55: 50-70%

As Mintel points out, time is running out for the non-retired over-45s who are not saving for the future. So, check out the actuarial figures above and consider how much of your income you really should be putting aside - and take action to start saving or to increase the amount you're saving already.

Why not learn to invest in Pensions and ISAs?