'Feeling the Squeeze', Royal London asks advisers their views

28 September 2016
Royal London carried out a UK wide survey with 2,500 consumers age 35-44 over the summer. The survey found that over a third, 34% said their finances felt Squeezed and so were struggling to meet day to day expenses, despite 87% being aware that they need to save more.

However, the survey did also identify positive Savings Moments of Truth (MOTs) when some financial commitments such as car finance or nursery costs come to an end which could free up money to be used to save for retirement.

To support the research with consumers we also wanted to find out what our advisers thought. Nearly half of the advisers surveyed said clients who class themselves as Squeezed (that is where keeping up with bills and repayments is a constant struggle) are engaging with their retirement savings but are struggling to save more. 150 advisers responded to our poll which concluded: 

  • 75% of advisers with clients age 35-44 said they aware at least slightly engaged with saving for retirement.
  • 57% said that any extra money available to clients would be used to reduce debt or ease financial pressure rather than save into a pension.
  • Only 17% believed that those who felt Squeezed would use extra cash to boost pension savings.

Commenting, Fiona Tait, Pensions Specialist at Royal London, said: 

While our findings show that many people are ‘Feeling the Squeeze’, it is good news that advisers think their clients are engaged with saving for retirement. Even if people can’t afford to save more now, it is possible to create a definite plan of action to save more in the future when their income increases or outgoings are reduced.

Encouragingly, the wider research showed that those who had spoken to an adviser valued their advice. 87% of 35-44 year olds who had spoken to an adviser saying that they would be likely to do so again in the future. Of those who had used an adviser, 45% reviewed their finances with an adviser at least once a year.

Identifying your client’s Savings MOTs could help encourage them to redirect freed up finances into their retirement savings.

For example, those with a mortgage to be paid off within the next 15-20 years could contribute 5 years of payments which on average are £500-£599 per month into their pension, securing a potential boost to their pension pot of over £20,000.*

Fiona Tait continued: “Nearly half, (45%) of 35-44 year olds surveyed, said  that after first speaking to an adviser about their pension options they are now reviewing their finances with an adviser at least once a year. These reviews are a great opportunity to reassess a client’s current pension savings and set in place those Savings MOTs to potentially boost their future income in retirement over the long term.”

Read more detail on the Royal London’s Feeling the Squeeze research and the Savings MOTs or speak to your usual Royal London contact.

Notes

The findings of Pensions Through the Ages: Feeling the Squeeze, are based on in-depth quantitative analysis of 2,418 people aged 35 to 44 across the UK using a bespoke survey panel conducted by Harris 

Interactive UK from May 26th – June 9th 2016.  The statistics for this release is based on 203 individuals who said that they had spoken to an adviser at least once when reviewing or taking out pension products.

The adviser online poll was conducted by Royal London Intermediary marketing team from Thursday 16 June to Monday 20 June 2016 and is based on responses from 155 advisers.

*Saving £250 into a pension once mortgage payments are finished, until a retirement age of 65, could deliver £21,200 of pension savings.

Last updated: 28 Sep 2016

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London EC3V 0RL.