Only 7% of the UK population is close to being ready for the retirement that they want, with an alarming nine out of ten falling well short of their targets.
These are the findings of a new report by pensions and savings provider Aegon into the UK’s readiness for retirement.
The report found that, on average, the UK wants an annual retirement income of £35,000, but at their current trajectory they’re set to see just £12,000 a year when they reach the end of their working life, pointing to a huge gap between expectation and retirement reality. People are simply not saving enough to have the retirement they would like.
Worryingly, when it comes to awareness of how to plug this shortfall, only 3% appeared to know how to improve their financial position.
People are also expecting to retire earlier than the state pension age. By 2018 the state pension age will be 65 for both men and women. According to the survey, at the moment the UK is expecting to retire earlier, at around 63 years of age. Current Government data suggests that the state pension age will rise to 68 by the time under 25s hit retirement. However, the survey reveals that this age group currently expects to retire at 64.
In light of this ‘optimism’, perhaps most concerning is that nearly a third (30%) of respondents have never looked to change their retirement plans, and 42% have never checked the performance of their existing retirement savings.
“We know that most of the UK population are falling short of their retirement objectives, and that many aren’t reviewing savings enough to be aware of the shortfall,” commented David Macmillan, Managing Director of Aegon UK. “It’s time for the UK to get real, and for the pensions industry to lead the way in helping people find solutions. Showing people how to take small steps that will make a difference is vital.”
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