By Marcus Leach
Poor money management is leading the UK down a path to financial ruin, following news that Britain faces a £9 trillion shortfall in savings to support the next generation after they stop working, according to accounting software specialists Accountz.
Research carried out by the Chartered Insurance Institute (CII) identified that the country faces a staggering £9 trillion deficit which will have a major impact as to how the youth of today will support themselves in later life.
The report suggests Britons will need to save more than £16,700 each year to live comfortably, cover long-term care costs, and pay back debts in their retirement. However, as the average British salary is estimated at around £22,000 p.a. there is a cause for concern as to how the next generation will meet these expectations.
Quentin Pain, founder and chairman of Accountz is concerned by this news and feels that more needs to be done to educate Britain regarding money management.
“The news coming out of the CII is very worrying. People are potentially facing a very difficult future. Life expectancy is increasing and salaries are declining. Young Britons are going to need to take greater responsibility when it comes to their future,” he said.
Pain suggests a greater emphasis is needed when it comes educating people about the risks associated with failing to prepare for their future. He backs schemes such as the recently launched Money Advice Service, which aim to offer free, unbiased help for people with money worries, and strongly believes that money management needs to be taught within schools, and more support offered in the work place for employees looking to invest in pension schemes.
“The report really shows that there is a basic lack of knowledge and understanding when it comes to financial management that’s not just confined to planning for your retirement," he added.
"Money management within the UK is a real problem and if not addressed will be disastrous for our future. There are plenty of tools available that aim to help people improve their budgeting or keep household expenses in order but these can only go so far. There needs to be a bigger push from the government to reinvigorate long-term savings, and this must start at a young age.”