GENERATION OF MIDDLE-AGED SPENDTHRIFTS PUTTING THEIR RETIREMENT DREAMS AT RISK, SAYS PERTEMPS

UK workers are risking poverty in their old age by failing to make sensible savings arrangements for their retirement, according to new research from independent recruitment group Pertemps.

The overall result of the study, which quizzed 500 full and part-time workers, found that two in five did not contribute to any private pension scheme, while 14 per cent did not have a long term savings account or investment fund.

It also showed that people were leaving long term financial planning until late in life. Nearly a quarter of those quizzed had not set up a pension plan before the age of 30, with a further one in five failing to contribute to a savings fund by the same age.

Recent studies have indicated that poor stock market conditions and demographic pressures have ravaged pensions funds and led to an acceleration in the number of employers moving away from final salary schemes. Pertemps' research suggests that workers are reacting to these trends by abandoning sound financial planning altogether and embracing the debt culture.

Of greatest concern is the emergence of a whole new demographic group, the middle-aged complacent savers - or "Macs" - who are particularly bad at putting enough money aside for a rainy day, despite the fact that they are closing in on retirement age.

The Macs, who are aged between 36 and 55 years, earn the highest average salary in the survey but have a notably poor record of financial planning. Three in five of those questioned within this age group had failed to start their pension fund before the age of 30, with one in three claiming they had no independent pension provision whatsoever.

And, despite their late start to pension planning, there was little sign that Macs were making up for lost time, with only one in seven currently saving more than 30 per cent of their salary per month. One in ten indeed claimed they had no savings or investment plan at all. Furthermore, Macs were a third more likely to have a personal loan than the other age groups and nearly twice as likely to be saddled with a mortgage.

However, the Macs are clearly an optimistic bunch. In spite of their financial failings, three-quarters of this age group still believe they will be able to afford to retire by 65 - while more than 80 per cent claimed they would like to retire before the age of 60.

Janet McGlaughlin, a director of the Pertemps group, said:

"Our findings show that a worryingly large cross-section of the population are failing to provide for their long term future by investing sensibly in pension plans and savings products. And it seems the worst culprits fall within the middle-aged bracket that most desperately needs to intensify their investments ahead of retirement. This does not bode well for the financial health of the UK's pensioners in the next decades.

"Mortgage commitments, a lack of trust in the pensions industry and the impact of low interest rates no doubt lie behind this low-save, high-spend culture. However, workers need to recognise that prudent planning from an early age can make the amount they need to put aside per month for a good retirement nest-egg far more manageable."

Pertemps has teamed up with pensions provider AXA to offer its own fully approved stakeholder pension scheme to all its temporary workers. Its employees are provided with the information on their first visit to Pertemps.

Last year, it also announced a unique share incentive scheme that allows both permanent and contract workers to buy shares in the company. This will come into effect at the start of next year and will allow workers to gain from the group's continuing growth.

"Sound financial planning is important whether you are a permanent or temporary worker," Janet McGlaughlin added. "At Pertemps we are working hard to ensure our staff have easy access to a range of sensible investment schemes so that they can save now for a prosperous future."

The basic state pension is approximately £77 per week for a single person, with married couples receiving just over £120.