Toby Strauss: Despite bleak reports on pension provision, there is time to save future generations’ retirements

IN TODAY’S low-interest, low-growth environment, savers have never had it so tough. With disposable income under increasing pressure, people are finding it more challenging than ever to find the money to invest in their retirement.

Those challenges are clear in Scottish Widows’ annual pensions report, which shows less than half of the population is saving enough for retirement.

At least those still making some kind of provision are giving themselves a fighting chance because our survey of 5,000 adults from across the UK found that a staggering one in five are not saving anything at all for retirement.

In an era where we are going to see a retreat from state benefit provisions, the future looks bleak for those not able, or not motivated, to save. Despite the stark research and ongoing economic challenges, there is still reason to hope that we can ensure future generations enjoy a comfortable retirement.

Later this year, new rules that will automatically enrol staff into a pension scheme will take effect. Occupational pensions should once again become the norm, not the exception, as recent years have threatened .

Government is also looking to radically reform state pensions, which, if successful, will see the end to mass means-testing for pensioners and a clear and unified higher state pension for the millions of people reaching the end of their working lives.

These reforms have the potential to turn the tide on Britain’s long-lamented savings culture. But our research shows that if these reforms are to be successful, even more action will be needed.

Here in Scotland we know how the current economic downturn is hurting the younger generation – a group that is also becoming increasingly marginalised in the savings arena. Only half of the 18 to 29-year-olds surveyed in our research are in full-time employment – that means 50 per cent may not have access to the new automatic enrolment rules coming into force. Only 55 per cent of the same group are debt-free, with average debt-levels at an eye-watering £13,400.

Women have less savings for retirement. Like younger generations, the current economic environment is making it especially tough for women, particularly the large number in part-time and temporary employment.

It is right that pensions reform is focused on the workplace but we also need to find ways to support these two groups – the young and women – many of whom are finding the job market particularly difficult.

Finally, we also need stability and certainty for the long term. Savers must have confidence in the products available to them, and the industry has much to do to restore that trust. People also need assurances from the government that the reforms being introduced this year will be given time to take effect.

• Toby Strauss is group director of insurance at Lloyds Banking Group