Millions working into old age because they don’t pay into pensions

Millions of people face the prospect of working into their 70s or 80s to make ends meet amid a pensions timebomb.

A probe by the Financial Conduct Authority reveals a third of workers – roughly 15 million people – are not saving towards retirement.

Those who are depending on the state pcould be in for a rude awakening.

Writing in the Mirror, FCA chief executive Andrew Bailey says: “Around 15 million adults who are not retired are not paying into a pension…

“While the state pension is a hugely important part of retirement provision… for many people it is not enough to maintain living standards.” He adds the FCA’s largest ever survey into the nation’s personal finances, a poll of 13,000 people, shows “many are not saving enough for their retirement”.

The average amount being put away is 4.2% of earnings, experts recommend at least 12%. The FCA’s report Financial Lives, comes as experts predict the pensions crisis will worsen.

With the population getting increasingly older, the state pension age keeps rising in a bid to reduce the escalating pensions bill.

The looming turmoil comes despite many people being automatically enrolled in workplace pension unless they have opted out.

Former pensions minister Sir Steve Webb said: “The good news is over eight million people have been enrolled into a workplace pension in the last five years.

Credits: Getty“But many of these people are only putting a few pounds a week into a pension… Contribution rates now need to be steadily increased if people are going to be able to afford to retire.”

Pensions expert Tom McPhail, of brokers Hargreaves Lansdown, said: “For all the success of auto-enrolment…, it is worth remembering there are almost as many who have been left behind.”

Those with no pension pot may have to claim extra benefits, mean­ing more strain on public finances.