The Association of British Insurers (ABI), in its annual State of the Nation's Savings survey, is warning that almost 33% of working adults are not saving for retirement and that another 16% are not saving enough to provide them with an adequate income.
ABI also noted that 25% of employers would consider "levelling down" their current pension contributions, when personal accounts are introduced.
Chris Kenny, director of life and pensions at the ABI, said:
"The broad direction of travel on pension reform is right. Bit there is still a long way to go both to encourage more saving and to get the details of personal accounts right.
In this context, it is even more vital that the Government takes action to ensure that existing private pension provision is allowed to prosper and grow."
However, as I have already noted on this site, given the lousy reputation of the British financial services industry (excessive bank charges, mis-selling of insurance and the endowment loans scandal) it is hardly surprising that people have lost confidence in it and are not saving.
My opinion is shared by others, Doug Taylor, personal finance campaigner at Which?, said:
"It is staggering that the industry responsible for endowment and pension misselling, which so undermined the confidence of the British consumer, is now trying to undermine a Government scheme to protect the interests of the 10 million people who currently have no provision for their retirement.
For the ABI to cast doubt over these landmark pension reforms will do nothing but feed a consumer confidence crisis. We need to move the debate on from points scoring and really focus on how the industry plans to instil trust to encourage consumers to save now for their retirement."
Until the financial services industry smartens up it act, and restores people's confidence in it there will be little that the government and other bodies can do to persuade people to save more.
Quite simply people do no think that there is any point in saving, as they have seen their money wasted on endowment policies, insurance policies and how they are being screwed by the banks and credit card companies.