Less than one in 10 (7%) UK adults are financially on track for their retirement, according to research from Aegon.
Its third UK readiness report, which surveyed 4,000 UK adults, also found that nearly two-thirds (62%) of respondents do not feel confident about being able to retire when they want to.
The study also found:
- More than half (55%) of respondents admit to having never checked their pension savings.
- Around two in five (41%) don’t know how much they’re paying into their pension pot.
- The UK’s readiness score has fallen over 12 months from 52 to 47.
- 59% of respondents say they have no idea how much their employer is contributing to their pension.
- 35% don’t even know whether they’re eligible to be auto-enrolled into a workplace pension.
- Half (50%) of respondents have never done anything to review their retirement plans.
- Just 38% feel confident about being able to retire at their target retirement age.
- More than three-quarters of respondents (79%) plan to rely on their workplace pension as their main source of post-retirement income, and just 6% said they’d leave the auto-enrolment scheme when the minimum contributions rise to 5% in 2018. In fact one fifth said they would go so far as to increase the amount they saved beyond the minimum requirement.
David Beattie, managing director of Aegon UK Direct said: “It is deeply worrying that as a nation we’re still failing to prepare for our futures, despite the big changes made to pensions in recent years.
“We have a new government, and with this, the opportunity to ensure the pension reform of the last parliament is implemented successfully. The focus has been primarily on giving those approaching retirement more control of their savings, something that we wholeheartedly support.
”But it is time for a shift in emphasis from both government and industry. We must now focus on the savers, and do more to help them save for the retirement they want.
“There’s a huge disconnect between the amount people have saved and the retirement income they want in retirement. Most people want an income, which would require more than £1 million of savings. How close are they to that?
“With the lifetime allowance due to fall to £1 million, unless individuals also have substantial non-pension savings or defined benefit pensions, £42,000 isn’t just unrealistic – it’s more than the government will allow!
“We now have online tools that could, and should help people to engage in a simple, but effective way. There is a clear appetite for digital and mobile services; 61% of people want to manage their pension online, but currently just 23% do so.”