Pension: Savings as important as a retirement pot for many Britons

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Pension saving is an endeavour undertaken for the future, often decades in advance of retirement. Under pension arrangements, Britons are required to contribute money which is then effectively locked away until they decide to depart from the workforce. Pension saving can therefore be an effective and regular method of saving for a later date, particularly for those who wish to enjoy a comfortable retirement.

However, the lockdown crisis has clearly made many people reevaluate their methods of saving more generally.

According to a new survey, a large number of Britons now place equal importance on accessible savings in the present, as they do on pension saving for the future.

Research undertaken by workplace saving specialist, Cushon, showed 73 percent believed current savings and future pension pots were both vital.

The survey asked 3,000 adults about their finances during the COVID-19 crisis.

In addition to those who believe pension and current savings are important, a high number also reevaluated their finances during this time.

The study showed 77.5 percent said the crisis had made them realise the importance of having savings to fall back on.

The Money Advice Service has previously advised Britons that it is vital to keep a certain amount of money aside for emergencies.

Its website reads: “A good rule of thumb to give yourself a solid financial cushion is to have three months’ essential outgoings available in an instant access savings account.

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“So, if you spend £1,000 a month on mortgage or rent, food, heating bills, and other things you can’t live without, you should aim for £3,000 in emergency savings.

“But, remember, any amount saved will help you if you have to pay for something you weren’t expecting.”

However, thankfully, the survey also revealed many employers were on side with helping their workers to save.

A total of eighty four percent believed they should be helping their employees build  up accessible savings.

In addition, a staggering 92 percent believed setting up a workplace savings scheme alongside a pension scheme could be considered.

This type of scheme would allow employees to contribute directly from payroll – making it more accessible to everyone. 

Steve Watson, head of proposition at Cushon, commented on the findings of the organisation.

He said: “Financial worries are widespread and there is so much uncertainty for many of us right now.

“Providing a workplace savings initiative, where employees can contribute directly from their pay packet is a great way for businesses to support financial wellbeing and help employees become more financially resilient.

“We’ve seen a steady increase in companies offering workplaces savings initiatives over the last couple of years, as financial wellbeing has crept up the corporate agenda.

“But the pandemic has definitely amplified the need and as our research shows, employers are stepping up to the plate and looking to put something in place.”

The Money Advice Service has recommended that Britons regularly assess their finances and make changes if necessary to suit their circumstances. 

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