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Consumers facing up to retirement funding gap but more needs to be done

There are early signs that pension freedom is concentrating the minds of savers, according to John Male, managing director of EFG Independent Financial Advisers, with offices in Birmingham, Wolverhampton and London.

He says the latest snapshot shows realism is beginning to creep in as to what sort of retirement they might expect.

But Mr Male insisted there was a very long way to go with expectations still massively out of kilter with the likely reality.

His comments follow new research from Aegon indicating that 12 per cent of respondents are now on track, up from an even more dismal seven per cent a year ago.

Average annual income expectations have fallen from £42,000 in April 2015 to £38,000 today. Still far too high, but a definite improvement. Average actual projected income currently stands at £14,000, leaving a huge gap.

Mr Male said: “It seems that the radical government changes we have seen, coupled with the media attention they have received, are nudging people out of their complacency, but there is still much to do.

“The key to achieving an acceptable retirement income is to save as much as possible from as early as you can.”

Mr Male said widespread acceptance of the new flagship workplace pension scheme, with less than expected numbers opting out, was a good sign.

And he recommended trying to back this up with other long-term savings vehicles, such as an ISA, in order to offer additional financial security.

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