David Harrison, managing partner at True Potential LLP, says the UK is a laggard when it comes to saving for retirement, despite the UKs leading position in the global financial services industry.
Britons have been found to borrow more and save less than those in less developed countries, meaning that they are under-prepared for retirement. The average Briton is found to spend 19 years in retirement but with savings that will run out after just seven years.
David Harrison said: 'The savings gap is a very real issue in the UK and is set to become an increasing problem as the population continues to age without sufficient funds for retirement. It will also be made worse if we lose large amounts of financial advisers, as forecast by the outgoing FSA, as an unintended consequence of the RDR. The right adviser effectively persuades their clients to do more to save for their goals, sooner.
'Currently, only seven per cent of the UK adult population is actively self-investing, with £721 billion sitting in UK banks earning little to no returns. Greater education is needed on the best modes of investment in order to avoid significant social problems in the medium to long-term.'
Research has placed the UK significantly below countries such as India, Taiwan, Hong Kong and Singapore in a league of populations who regularly save. While those in Western economies such as the UK, Australia and Mexico favour short-term savings goals such as holidays, people in Asian economies are more orientated towards long-term goals such as retirement.
Harrison said British attitudes to saving 'drag far behind' other, less-wealthy European nations. A recent TNS survey showed people in Lithuania, Portugal, Malta, Slovakia and Cyprus all felt saving was considerably more important than people in the UK did.
The same survey highlighted that people in countries such as the Netherlands, Denmark, Switzerland and Belgium are taking greater action to prepare for retirement than those in the UK.
Harrison added: 'Our role in the financial services industry is to make it easier to save. The trend towards impulse borrowing is a huge concern, with the availability of payday loans making it very easy to do so. This, along with the concerning findings of this research, has placed a requirement on the financial services industry to provide better education on how to manage finances and prepare for the future.'