Six in ten (60%) pre-retirees across the world are under prepared for the financial rigours of retirement, according to Aviva...

Six in ten (60%) pre-retirees across the world are under prepared for the financial rigours of retirement prompting real concerns of a global pensions crisis, according to a 2006 survey into consumer attitudes to savings by Aviva, the savings, investment and insurance group.

The annual study, which has over three years surveyed 50,000 people from 23 countries found that 48% of all retired people regret not doing more to provide for their retirement and half of all pre-retirees expect to work in their twilight years to fund their future.

Richard Harvey, group chief executive at Aviva, commented: “Our research shows that the pensions black hole is not just a UK-specific issue but an area of global concern.  Broadly, the world’s pre-retired population seems to have resigned itself to the fact that the term ‘retirement age’ may not apply to a specific age and will become increasingly ambiguous.”

Sian Davies, chief executive of the Henley Centre Headlight Vision who carried out the survey for Aviva, commented: “From this global survey it is apparent that consumers need to redress the balance between the age they hope to retire and being able to fully meet their financial needs throughout retirement.”

A house isn’t a pension, it’s a home

The surge in house prices over the past five years in the UK is one area where adults have increasingly looked to supplement retirement income, with more than one in two Brits (58%) seeing their current home as “investments for their future”. This statistic prompts obvious fears that if property prices in the UK were to crash, then many pensions would go too. This concern is not just confined to UK shores - the Irish and the Americans are even more reliant on property prices.

Richard Harvey commented: “With property currently offering healthy returns it is easy for would-be retirement savers to be blinkered. We would urge all pre-retirees to diversify any retirement portfolio and not to put all their savings under one roof.”

The perceived complexities around pensions and savings appear to be a major reason for many people throughout the world not saving for retirement - from 53% of Hungarians down to 23% of Germans.

Richard Harvey commented: “It is evident that there are a significant number of people who want to arm themselves with clear and concise information and, in many cases, they are going on to the internet to find it.

Not saving and not concerned?

Savings means different things to different people - only one in five (20%) adults in the Netherlands are concerned that they have not saved enough to fund their retirement, compared with six in ten (58%) Americans. Currently 43% of the UK are concerned over the level of their current savings for retirement, however, only a third of people in the UK (31%) are planning to use their savings for retirement.

Aviva found that only 3 in 10 Brits are currently saving for retirement, compared with almost half of Americans and three quarters of Hong Kong citizens.

Currently, Eastern Europeans are the most averse to retirement planning. Perhaps this can be explained through the history of the region, where the state would have provided in retirement. As expected, the numbers of retirement planners in Western Europe is significantly bigger.

Richard Harvey concluded: “Retirement planning throughout the world is an issue that needs resolving. Globally, we are in a situation where inaction leads to anxiety rather than anxiety leading to action.

“As the population grows, so does the stress placed on state pension schemes. Unless people make a concerted effort to take control of their retirement, by planning effectively, we shall continue to see a worrying trend that will ultimately lead to higher numbers of people struggling to adequately fund their retirement.

Aviva's Six Step Plan

With this in mind Aviva has launched www.six-steps.org to engage more consumers in financial planning for the future. The free, unbiased planning resource has been created to help people make informed financial decisions about their retirement. The site takes people through six simple steps towards planning a secure and financial healthy retirement:

• Step 1: Take control - make a plan for your future
• Step 2: Know yourself – how do you feel about money and taking risks
• Step 3: Save little and often – put some money aside every month
• Step 4: Invest for the future – build up your long term savings
• Step 5: Protect yourself – look after yourself and your money
• Step 6: Get advice – speak to a financial adviser

Richard Harvey explained: "“Aviva has launched six-steps.org to enable pre-retirees the opportunity to improve their retirement prognosis by helping them plan for all eventualities. Users are encouraged to set a retirement goal and work towards it to try to alleviate some of the pain that is faced by the current retiring generation.”

The Economic Secretary to the Treasury, Ed Balls, said: "Financial products are complicated and there can be too much jargon. This puts people off, or they can end up buying something that is not right for them. Sometimes people just want to discuss their financial options and not buy anything. We believe there is a gap in the provision of this last type of advice - generic advice - and we are pleased to see Six-steps.org playing a role in this area."

For more information please visit www.six-steps.org