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Four in five savers face poorer living standards in retirement

The majority of British pension savers are set to experience a fall in living standards when they stop working, with many facing retirement with no savings at all.

14 JUNE 2018 | CHRIS SEEKINGS

Pensioners face fall in living standards ©Shutterstock
Pensioners face fall in living standards ©Shutterstock


New research by Aegon has found that less than a fifth of adults aged 55-64 have more than £300,000 in pensions – the average amount needed for someone to maintain their current lifestyle.

It was also found that one in eight do not have any pension savings, while over a quarter are unsure about how much they have, rising to more than a third for those aged 65 and above.

“These figures should set alarm bells ringing,” Aegon pensions director, Steven Cameron said. “Despite the introduction of auto-enrolment, there are many entirely unprepared for retirement.”

The research involved polling 946 adults, finding that 38% are not confident about retiring comfortably, and that many are unsure where their income will come from in later life.

Approximately 36% have never estimated how much money they will need in retirement, with Cameron saying the “worrying” figures highlight the need for people to plan early.

“Many people may put off finding out how much they have saved, fearing it will be less than they’d hoped or will need,” he continued.

“But however unsettling, the earlier you carry out a reality check, the more chance you have of doing something to get back on track.”

This comes after previous research found that the UK could be facing a midlife “savings crisis”, with one-fifth of people in their fifties and sixties unable to put aside anything for retirement.

In addition, two-thirds of those aged 50-59 are failing to ramp up pension saving in the run-up to retirement, despite 51 being the average age they expect to reach their peak earnings.

“It's worrying to see so many older workers in the dark over how much they need to save to afford a comfortable retirement,” Aviva Savings and Retirement managing director, Lindset Rix, said.

“Planning and provisioning for retirement can be a great unknown, and complicated for many, but burying your head in the sand will only worsen the situation.”


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