Headline: UK Retirement Outlook Worsens as 39% Struggle to Save Adequately
Recent research by Scottish Widows reveals a troubling trend in retirement preparedness, with nearly two-fifths (39%) of UK adults at risk of inadequate lifestyles in retirement, an increase from 35% in 2023. The survey, which involved 5,167 participants, indicates that 1.6 million more people may face retirement poverty.
Despite a rise in pension savings—projected retirement incomes have increased from £15,500 to £17,200—50% of respondents acknowledge they are not saving enough. Although 69% feel financially independent, a significant quarter do not share this confidence, with 44% believing they may never achieve financial independence.
Among younger individuals in their 20s, 25% prioritize setting aside money for emergencies, alongside saving for house deposits and vacations, while 13% report they are unable to save at all. For those in their 30s earning between £20,000 and £35,000, 46% contribute only the minimum of 8%, facing an average 60% drop in retirement income. Disturbingly, 60% of people in this demographic recognize they need to save more, yet 30% do not save anything at all.
Pete Glancy, head of pensions policy at Scottish Widows, emphasized the urgency of targeted measures to alleviate potential retirement poverty, advocating for a comprehensive approach in evaluating people’s financial journeys and tackling issues such as auto-enrollment and self-employed contributions.
Paul Leandro of Barnett Waddingham echoed these sentiments, noting that while pension saving levels are on the rise, they remain insufficient amidst a high cost of living and low contribution rates. Leandro highlighted the necessity for decisive governmental action to prevent a looming crisis in the UK’s pension system.
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