AFTER A lifetime of work and years spent looking forward to a comfortable retirement, a new report shows that a very different reality awaits people in Wales, who will face a choice between working well into old age, or surviving on just £13.18 per day. 

A 12 month research project into the UK’s savings and debt habits has unmasked the true scale of the crisis that is developing in UK society today, where millions of people face a future of poverty and State-dependency in retirement, if indeed they are ever able to retire. The ‘Tackling the Savings Gap’ project by financial services firm True Potential was launched in August 2013 to examine the true state of the UK’s personal savings and debt habits., as well as preparations that individuals are making for their own retirements. The effects of the financial crisis of 2008 onwards, high inflation, government austerity, low interest rates and easy access to high cost credit through payday loan companies as well as decades of poor financial education and complicated regulations have created a Savings Gap – the difference between what people need to live comfortably in retirement and the amount they are actually on course to receive. Since August 2013, True Potential has asked more than 6,000 people from across the UK about their personal finances and provisions for retirement and the findings clearly show that a crisis in old age is looming with people saving barely a quarter of the amount they will need. True Potential asked how much money savers would need to live comfortably in retirement. Thirty two per cent of respondents said that they will require between £16,000 and £25,000 per year. To achieve an annual income of that size, they would need a fund totalling £400,000 from which to draw an annual income of £20,000 for 20 years. To reach a £400,000 pension pot requires an annual saving of £8,888 over a 45 year working life. However, the data shows that savers in Wales today are: only managing to put £2,132.52 each year towards their pension pot; building a fund of £95,963 by the time they retire from which to live on; going to have to survive on an annual income of £4,798.15 or a daily wage of just £13.18 in retirement. Nationally, men are marginally better savers than women, but the situation remains bleak for all. Men are managing to save £3,603 per year compared to £2,260 for women. The 18-24 age group – the group with the most time to build up a large enough retirement fund – is managing to save £2,828 per year, though females in this age category are saving less – just £2,556 per year. All are well short of the target £8,888 needed to provide a £20,000 annual income in retirement. Only three per cent of Welsh savers surveyed as part of the research claimed that they would be able to survive on between £6,000 and £10,000 per year, with 79 per cent saying they would need at least £11,000.