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62% of Brits could be making a terrible retirement savings mistake

I’ve said it before, but retirement saving statistics never cease to amaze me. We all know that saving for the future is important, yet studies continually show that very few people are making retirement saving a priority. 

Not taking it seriously

Consider this statistic from pensions and investment specialist LV. According to LV, which recently surveyed 2,400 people across the UK on their savings, 62% of those surveyed aged 45-54 didn’t know how much they’d saved for retirement. In other words, this suggests that more than six in 10 people are really not taking their savings seriously. How can people possibly expect to live a comfortable retirement if they’re not aware of how much money they have saved now and how much they still need to save in the future?

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More time spent planning a holiday

It gets worse though. LV also found that 51% in this age bracket hadn’t thought about their retirement savings at all in the previous year and those that had done so had actually spent more time planning a holiday than their retirement. Again, this shows that many people are just not taking their retirement planning seriously.

No savings

What’s also worrying is just how much money the average person actually has tucked away for retirement. There appears to be a big gap between how much people have saved, and how much they need to live a comfortable lifestyle in retirement.

For example, according to LV, to live comfortably when you stop work, you need to have around £311,000 saved by 55 to sit alongside your State Pension.

Yet the pensions specialist found that the average pension saving for those aged 45-54 was just £71,342. Worse still, 39% of those in this age bracket had less than £50,000 and 13% had nothing at all.

Clearly, there’s a problem here. And one of the main issues is that people just aren’t making retirement saving a priority.

Leaving it late

What concerns me most about these particular statistics is the age group. We’re talking about 45 to 54-year-olds here.

It’s one thing to ignore retirement saving in your 20s. But in your late 40s and early 50s? That’s really worrying that people in this age group are neglecting their future prospects. As I explained last week, saving for retirement in your 40s is absolutely critical if you want to enjoy your retirement because in your 40s you still have time on your side. Leave it until your 50s, and it becomes much harder to build up a significant pension pot. 

The bottom line

Retirement saving doesn’t need to be time consuming or complicated. Yet it is important to at least spend a little bit of time on it every now and then to make sure you’re on the right track.

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Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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