Around 12.5 million people are not saving enough for their retirement, according to the government.
A Department for Work and Pensions (DWP) study, Analysis of future pension incomes, reveals that 38% of working-age people – around 12.5 million – are not putting enough money aside for retirement.
The DWP said this figure was “a large proportion” of the UK’s population, adding that the level of under-saving increases to 43%, or 14.1 million, when the majority of an individual’s defined contribution pension is converted into an annuity.
The analysis measured people’s pension savings against target replacement rates. Of these savers, just 42% could expect to reach more than 80% of their targeted retirement income.
The study also shows that 12% of working-age employees are under-saving for their retirement when compared with the Pensions and Lifetime Savings Association’s minimum level of retirement living standards. This increased to 51% and 88% when compared against the Association's ‘moderate’ and ‘comfortable’ retirement living standards.
• The deadline for people to plug any gaps they have in their National Insurance payments for the tax years 2006/07-2016/17 has been extended from 5 April to 31 July, after systems struggled to cope with demand.
