Workers on low wages are facing a future of dire poverty because they are not building up savings or taking out private pension plans.
A report conducted by the Office for National Statistics (ONS) has warned that full time workers earning less than £300 a week are risking their financial futures, as less and less were putting money by for their retirement.
Just 16 per cent of men and 27 per cent of women, who earn less than £300 per week working full-time, paid into a private pension scheme. With many people unable to afford to put money aside due to the current high cost of living.
The ONS reported that numbers of employees taking out private sector pension schemes were dwindling overall. Figures published in 1997 showed that 52 per cent of employed men and 37 per cent of employed women had private pension schemes.
These numbers had decreased to just 39 per cent of men and 37 per cent of women employed full time who had private sector pension schemes by 2010.
Widening Savings Gap
Along with these findings the ONS also saw that fewer self-employed men, who worked full-time, were likely to have a private pension plan. 64% of men in this category had private pensions in 1989 compared to just 38% in 2010.
The only growth shown in pensions market has been in the public sector. The percentage of male public sector employees having a private pension scheme was unchanged from 1997 to 2010 at 87 per cent. The proportion of female public sector workers grew in the same time period from 75 per cent to 82 per cent.
These figures clearly show a widening gap in savings between the public and private sectors.
The ONS report backs up other published surveys, that there is real concern for the future for many Brits. The failure of workers to save adequately for their retirement is worrying, especially amongst younger employees.
Pension giants, Scottish Widows, published their report earlier this month stating that only 47 per cent of people aged 30 to 50 were actively preparing for their financial retirement. The figure for those over 50 rose to 59%.
However, the survey showed that almost half of employees were not making adequate savings towards their retirement. It has been estimated that employees should be saving at least 12% of their earnings per year in a pension fund or other investment.
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