Nine in ten (90%) UK employees are falling short of their retirement targets, according to research by Aegon UK.
The Aegon UK Readiness report surveyed 4,000 UK employees to assess their behaviour, awareness and finances to determine their readiness score, which provides a mark out of 100 to indicate how ready a person is for retirement.
The report was carried out in advance of the launch of Aegon UK’s Retiready, a new digital service designed to help people consider their retirement ambitions and understand their overall readiness for retirement.
The average readiness score among respondents was 52 out of 100.
Only 7% achieved a readiness score of 70, the level required to demonstrate they are close to being on track for the retirement they hope for.
The report found that, on average, UK workers want an annual retirement income of £35,000, but at their current trajectory, they are set to see just £12,000 a year when they reach the end of their working life.
The report also found:
- 56% of respondents believe the maximum basic state pension to be higher than £110.15 per week.
- 30% of respondents have never looked to change their retirement plans, while 42% have never checked the performance of their existing retirement savings.
- Men are more likely to have reviewed their pension planning within the last year, and are making significantly higher regular pension contributions (£328 versus £175 per month).
- 48% of respondents aged between 55 and 64 have reviewed their retirement plans in the past six months, while only 22% of those aged between 16 and 24 had.
David Macmillan (pictured), managing director of Aegon UK, said: “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.
“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. We must empower rather than frighten people, and help them take control of their future finances.”