GLOBAL - The economic downturn has led more than one in 10 of the global population to stop saving for retirement, HSBC has revealed.
Findings from the firm's Future of Retirement Report 2009: 'It's time to prepare' showed 11% of UK workers and 10% of French workers had already stopped saving because of the financial crisis, compared to 24% of Mexicans and 2% of Japanese workers.
The study also highlighted the increasing gap in "preparedness" for retirement across the globe, as 87% claimed they were not well-prepared. While workers in South Korea and Japan are the least ready for retirement - 98% and 97% are not saving respectively - the UK is the second-best prepared for retirement, behind India, according to the study though the figures are still low as three-quarters of those questioned in the UK feeling unready for retirement financially. French sentiment matches the global average of 85%.
Figures from the annual survey, conducted by Cicero Consulting, said while a further 43% of those questioned feel prepared for retirement to some degree, they do not have a clear idea of what their retirement income might actually be.
HSBC warned that changes in demographic trends, with the world's population of over-65s set to rise from 550 million to 1.4 billion by 2050, mean people have to take greater responsibility for pension provision.
That said, the report also suggested that the impact of the financial downturn on short-term finances and a lack of financial education - 43% of people have never received any form of financial education and only 27% understand their long-term finances - had highlighted opportunities for governments, employers and financial institutions to introduce saving incentives and provide help in understanding financial products.
The survey of 15 countries, which included findings from the US, Canada, UK, France and China, also showed that globally 23% of respondents supported plans to encourage people to work longer and retire later, while 31% said they prefer a system of encouraging private savings through tax relief.
This voluntary approach to saving is most popular in countries such as the US, where it was supported by 55%, along with Canada, UK, and Brazil, while the longer working lives was the preferred approach in South Korea and Singapore where it received 52% and 45% support respectively.
The introduction of pension reforms, such as more generous social security systems provided through higher taxes, were only supported by around 13% of people globally, while support for compulsory savings was just 17% and auto-enrolment into workplace pensions was popular with only 16%.
Stephen Green, group chairman of HSBC, said: "A perfect storm is confronting pensions planning, created by an ageing population, falling pension funds values, a drop in state and employer contributions and an economic downturn which is forcing people to make tough financial choices."
Mark Twigg, director at Cicero Consulting, said: "As the economic ‘perfect storm' threatens it is important that people are encouraged to understand long-term risks and to manage them effectively. While people are taking more responsibility for themselves, there is also a definite role for financial institutions to continue, and to build on, their work to educate and inform."
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