A major building society has warned Brits could be left with nothing in their pension after just four years. Skipton Building Society has found a disconnect between expectations and reality among older savers.
One in seven Brits aged 65 and over thinks that £100,000 would be enough to retire on. According to Retirement Living Standards, this falls hugely short of what is needed, even when combined with the State Pension. Skipton’s research found that 38% of adults have given no thought to retirement, despite this forcing Brits to delay leaving employment. Among those aged 65 and over, 17% said they didn’t know how much they pay into their pension each month. And 39% of them expressed concern that their savings would run out prematurely. One in six retirees returns to work, research shows, with this often a financial necessity rather than a personal choice.
Those aged 65 and over had the lowest expectations of how much they would need to retire. In contrast, one in 10 Gen Z workers thought they would need over £1million to retire.
A third didn’t know how much they put into their pension pot every month and believed they would require less money as they got older, despite the rising cost of living.
Helen McGinty, head of financial advice distribution at Skipton Building Society, said: “With many not knowing how much they’re contributing each month to their pension, yet worried about not having enough money, it’s time to wake up to the reality that those dreams won’t happen without planned and considered action.”
She added: “The earlier you start planning, the more options and flexibility you’ll have later on. It’s also important to think carefully about how your retirement savings will support you throughout your lifetime, especially as health and lifestyle needs change.”
Skipton said that, for a comfortable retirement, Brits should aim to have pension savings exceeding £200,000.
Someone starting at 30 would need to save roughly £89 monthly to accumulate £100,000 by age 65, rising to £168 from age 40 or £375 from age 50.