Too many people have too little pension savings.

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Over a third of British adults, equating to 13.6m, do not have a pension, research from Baring Asset Management, claimed.

The investment management firm found that of this figure 1.4m people who are 55 and older do not have a pension in place.

While Barings is not surprised that a high proportion of people aged 18 to 24 do not have a pension, it found it worrying that 47 per cent of 25 to 34 year olds have not started saving into a pension.

The findings also show that an increasing number of men do not have any pension provision, as 30 per cent are currently without compared to 28 per cent in 2010. In contrast, more women this year have a pension as the number without has dropped from 47 per cent in 2010 to 44 per cent in 2011.

The annual study conducted amongst 1,589 non-retired adults in Great Britain also revealed people are increasingly reliant on their property to fund their retirement.

This year, 13 per cent of people said their property is their pension, compared to 12 per cent in 2010 and just eight per cent in 2009, which is a cause for concern given property prices have yet to recover fully from the lows during the recession.

Women are more dependent on property than men with 14 per cent saying their property is their pension compared to 12 per cent of men.

Marino Valensise, chief investment officer at Barings, warned with less people making pension provision, it was “highly likely” for those approaching retirement age, continuing to work indefinitely will be mandatory given they have no other income streams.

He said: “At the same time, it is concerning to learn that only half of people in their late twenties and early thirties are contributing into a pension scheme.

“Kick starting a pension around this time is absolutely paramount given the impact it has on the end sum. Investing into a pension little and often is a much better approach than not at all.”

Laith Khalaf, pensions analyst Hargreaves Lansdown, agreed it was worrying that a high proportion were still not saving for retirement but hoped the introduction of auto-enrolment would remedy this.

He said: “Auto-enrolment should improve matters although eight per cent contribution is just a start rather than the end of the matter.”

Mr Khalaf also warned against relying on the property you live in “for a number of reasons”.

He said: “You will get income from your home by either downsizing or from equity release. However, this won’t happen if the market crashes. Should you put all your hopes on one single asset? I don’t think so.

“In the short-term, there may be more people relying on their homes as a pension. However, five years ago, far more people would be relying on property as a pension but the credit crunch tempered people’s view of property and the realisation dawned that value can go down.”

Pensions savings should be part of any well structured financial plan. However it is not always the best method of savings and does depend on your own circumstances. Experienced fee based independent financial advice is essential.

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