It’s no secret that many Britons do not save enough to live off in retirement.
The bad news is that the number of people falling into that category is rising.
The annual retirement report published today by Scottish Widows, the life company, reveals that the percentage of people not on track for even a minimum retirement lifestyle has risen from 35% to 38% during the last year.
That equates to an extra 1.2 million people.
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The Pensions and Lifetime Savings Association (PLSA) defines a minimum retirement lifestyle as covering all the needs of a retiree “with some left over for fun and social occasions” – a holiday in the UK, a meal out once a month and “affordable leisure activities about twice a week”.
It estimates the cost of such a lifestyle to be £14,400 for a single retiree or £22,400 for a retired couple.
The PLSA assumes retirees qualify for a full state pension, which rose to £11,500 a year at the start of the current tax year, with retirees currently qualifying for the state pension at the age of 66. This is due to rise to 67 between May 2026 and the end of 2028.
The report, based on interviews in March and April with 5,072 people saving for retirement and deemed to be representative of the UK population, suggests that most people would like retire at the age of 62 but just over half, 54%, think they will have to work longer than they would like – on average by seven years.
Just over a quarter of those quizzed, some 27%, said they don’t feel they will ever be able to retire.
The report also spells out in stark detail the extent to which retirees depend on the state pension. Just over half of those questioned, some 54%, expect the state pension to eventually form “a meaningful portion of their retirement income”, with three quarters calling it “hugely important” in helping them pay for everyday necessities.
Just under one in eight people – some 12% – are worried it…
