Why city living is stopping people from saving for retirement
Nearly half (49%) of pension savers in the UK’s largest cities blamed the cost of living for not being able to save more, with those in Brighton, Bristol and Cardiff feeling the pinch the most according to the Prudential research of 2,237 adults.
Meanwhile some 31% of those surveyed across all cities said the reason they didn’t contribute more into their pension pots was the result of not being paid enough. In Bristol 50% of workers said they were not paid enough to save more for retirement, which was the highest proportion among the UK’s largest cities.
Sheffield was identified as the city where savers contributed the highest proportion of their monthly income to their retirement savings, with savers putting away an average 11p out of every £1 they earned into a pension, totalling £211 a month. However at under 5p from every £1, savers in Leeds put away the least.
Across UK cities the average monthly pension contribution is £150, which represents 6.5% of the average monthly wage of just over £2,300. At £226, Londoners made the highest monthly contribution, while Sheffield (£211) and Newcastle (£210) were the only other cities where average contributions were greater than £200 per month. Those in Plymouth, Nottingham and Leeds put away the least, averaging less than £110 per month.
The study also found that nearly a third (32%) of all savers admit they could afford to contribute more towards their retirement – but that percentage was much higher in Sheffield (46%), Edinburgh and Manchester (42%), and Newcastle (41%).
Stan Russell, a retirement income expert at Prudential, said: “It is encouraging that the retirement saving message is getting through, with our research showing the average amount saved monthly by those living in our major cities now standing at £150.
“But as life expectancy increases, the responsibility to provide for retirement will shift more and more to the individual and the best approach for most people is to simply save as much as possible from as early as possible in their working life.”