Scots risk poor retirement by putting less into pensions

Scots risk falling short of the income they need in retirement as monthly savings levels slip below the UK average, a report out today warns.

Workers in Scotland are saving less into their pensions than all but one other region of the UK, according to new research by Standard Life. Monthly pension savings in Scotland of £110 compare with a UK average of £137 a month, the Edinburgh-based insurance giant found.

Scots are saving £62 less each month into their pensions than people in England’s East Midlands and are less likely to think about their pension plans than people elsewhere in the UK. Only in the north-east of England are monthly pension savings lower, averaging £102.

John Lawson, head of pensions policy at Standard Life, said: “It’s surprising that despite our reputation for canniness, we are saving less for our retirement in Scotland than most other areas of the UK, particularly when you realise that the average income level in Scotland is actually higher than many other areas.”

Scots are investing less in their future plans because they spend too little time working out what kind of retirement they would like to have, believes Lawson.

“It suggests there is room for improvement and that planning for our retirement is something many Scots should start thinking about more.”

But Scots are also spending less on monthly commitments than most parts of the UK.

People in Scotland spend an average of £828 on the most common items of household expenditure, such as rent, mortgage repayments and mobile phone bills, £86 less than the UK average.

Monthly rent and mortgage payments are the lowest in the UK, while Scots also spend less on mobile phones.

The figures were published in a Standard Life report examining links between financial and emotional commitments. The study picked out three life stages characterised by different levels of commitment.

Those aged between 18 and 24 are described as “commitment sleepwalkers”, with low personal and financial commitments. In the “fully committed” stage, people aged 35 to 44 are at the peak of their regular financial commitments, spending an average of £1,160 each month on children, mortgages and other expenses. The “commitment slowdown” stage begins at 55, with monthly expenditure falling sharply.