Savings gap

Although we perhaps know that we should be saving more, it's something that can all too easily be put off until another day.

According to research out today from a top firm of pension experts, we're putting off saving to the tune of £30-35bn each year.

It's a warning that comes as the House of Commons Treasury Select Committee takes evidence on how to get round the savings gap problem and what can be done about it.

But is it all our fault or are we lacking some of the incentive to save that previous generations once had?

Decline

A falling stockmarket, pension schemes being wound up and endowment shortfalls are just some of the reasons we might be less inclined to save.

And the savings gap - between what we are putting aside and what we should be putting aside to maintain our standard of living in retirement - is on the increase.

The gap has grown even further since 2001, when it was £27bn, and on an individual level, this will leave some people far worse off than others.

Andy Rear, a consultant at Mercer Oliver Wyman, says: "The consequences really depend on the individual.

"Clearly some people have substantial amounts of savings, and some people are lucky enough to be in good quality occupational schemes for example.

But "other people have very little savings and therefore rely on the basic state pension {which is} falling in real terms and has been doing for at least 10 years."

Insufficient

To some, this is a timely warning but to others, it feels like scare tactics from financial companies who want us to invest more in their products.

There is savings activity taking place though - in "favourite" areas of investment.

For example, mini-cash Isas, national savings premium bonds and for the long term, property (the figures for the savings gap do take property investments into account).

Paul Davies from Mintel Market Research explains: "Mintel carried out some consumer research at the end of last year asking how much people were putting away each month for their retirement planning.

"More than 50% of people are saving less than £100, which is obviously insufficient.

"We also looked at how people would save for their retirement going forward. The highest response was via property.

"Four out of ten people said that they were saving for their future by investing in property. The next highest response was for Isas, deposit and savings accounts, and way down the list was occupational pensions and personal pensions."

Uneconomic

This is of little surprise considering the current savings climate, but the question is, what to do about it?

One suggestion to kick start saving again is to bring back door to door financial salespeople - like the old man from the Pru - provided that they're only allowed to sell very straightforward policies.

Andy Rear thinks this is a very good idea, although there are some issues that would need ironing out first.

"There are currently 11m households in the UK for whom it's uneconomic for the financial services industry to serve them," he says.

"They simply don't save enough for it to be worth someone knocking on their door and talk about savings."

So that may not be the whole answer, but it is clear that as long as there's a gap between the way people want to save and the sort of savings methods they are being offered by banks, insurance companies and pension providers, the savings gap will continue to grow.