Equally alarming is the fact that 1.4 million people who are 55 and older do not have a pension in place.
While it is not wholly surprising that a high proportion of people aged 18-24 do not have a pension, given other pressing demands on their income such as clearing debt and getting on the property ladder, it is worrying to learn that almost half of 25-34 year olds (47%) have not started saving into a pension - an age that is considered critical in terms of establishing the foundations of a pension fund.
The findings also show that an increasing number of men do not have any pension provision, as 30% are currently without compared to 28% in 2010.
In contrast, more women this year have a pension as the number without has fallen from 47% in 2010 to 44% in 2011.
Percentage of people who do not have a pension:
- 18-24: 69%
- 25-34: 47%
- 35-44: 27%
- 45-54: 30%
- 55-64: 26%
- 65+: 7%
The study, conducted annually amongst non-retired GB adults, also reveals that people are increasingly reliant on their property to fund their retirement.
This year, 13% of people said their property is their pension, compared to 12% in 2010 and just 8% in 2009, which is a cause for concern given property prices have yet to recover fully from the lows during the recession.
Women are more dependent on property than men with 14% saying their property is their pension compared to 12% of men. In fact, women are increasingly relying on their properties as only 9% said it was their pension in 2010.
Furthermore, 16% of those aged 65+ that are still in employment will rely on their property to fund their retirement.
Looking at the specifics of those who do have a pension, 52% (11.7 million) of working people have a final salary pension provision in place. Marginally more women (53%) have a final salary pension than men (51%).
This compares to one in three (6.6 million) who are in a defined contribution arrangement.
Marino Valensise, Chief Investment Officer, Barings comments:
"Having such a large number of people without any form of pension provision is very worrying. It is highly likely that for those approaching retirement age, continuing to work indefinitely will be mandatory given they have no other income streams.
"At the same time, it is concerning to learn that only half of people in their late twenties and early thirties are contributing into a pension scheme. Kick starting a pension around this time is absolutely paramount given the impact it has on the end sum. Investing into a pension little and often is a much better approach than not at all."
