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The proportion of people not on track for a ‘minimum’ standard of living in retirement increased to 38 per cent over the past year, research by Scottish Widows has found.
The provider’s 20th annual Retirement Report showed a 3-percentage point rise in the number of people that would not meet the Pensions and Lifetime Savings Association’s minimum Retirement Living Standard compared to last year’s report.
This is equivalent to an additional 1.2 million people, which is greater than the working populations of Liverpool and Birmingham combined.
Around a third (34 per cent) of respondents felt they were preparing adequately for retirement.
Scottish Widows noted that the increase in those forecast to suffer the poorest retirement outcomes had been driven by rises in the cost of living relative to wage growth.
The provider’s report also warned that a delayed retirement was likely for millions of people in the UK.
Most people would like to retire at 62, but more than half (54 per cent) of respondents expected to work for longer than they would like to, on average by seven years.
More than a quarter (27 per cent) of those who have made retirement plans believed they would never be able to retire.
Younger people (aged 18-29) wanted to retire earlier than average at 61, and were only prepared to work until they reach 64 if necessary, four years earlier than their state pension age.
Survey respondents also highlighted people’s reliance on the state pension, with 54 per cent expecting the state pension to form a ‘meaningful portion’ of their retirement income, and 75 per cent calling it ‘hugely important’ in helping them pay for everyday necessities.
However, 12 per cent said they were not convinced this level of help would be available to them by the time they retire.
“The growing gap in retirement outcomes and people’s quality of later life, between those who are currently retired and those who will retire in the future, is of great concern,” commented Scottish Widows head of pensions policy, Pete Glancy.
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