Pensions UK Says 77% of Workers Miss Moderate Retirement Income as Costs Rise
Updated
Updated · BBC.com · Jun 2
Pensions UK Says 77% of Workers Miss Moderate Retirement Income as Costs Rise
2 articles · Updated · BBC.com · Jun 2
Just 23% of UK workers are on course for a “moderate” retirement income, leaving more than three quarters facing what Pensions UK called a cliff-edge drop in living standards.
A moderate retirement now costs £32,700 a year for one person and £45,400 for two, with the report saying food and socialising bills have pushed those targets higher.
Only 9% of workers are on track for a “comfortable” retirement—costed at £45,400 for a single person and £62,700 for a couple—while 82% would reach only the minimum standard.
The minimum benchmark is £13,900 for one person and £22,500 for two, but Pensions UK said housing costs are excluded and savers should adjust the figures to their own circumstances.
The findings add to pressure for workers, employers and government to boost pension saving, after ministers revived the Turner Pension Commission amid warnings future retirees could be £800, or 8%, worse off annually.
Is the £500k needed for a 'moderate' retirement now just a fantasy for the average UK worker?
Auto-enrolment got millions saving, so why are 77% still facing a retirement income crisis?
Why does a woman’s pension saving fall behind a man’s at age 28, and can this gap ever be closed?
The UK Retirement Savings Gap: Why Millions Face a Shortfall and What Must Change by 2026
Overview
The UK faces a growing retirement savings gap as economic conditions change and living expenses rise. Many people are not saving enough for the retirement lifestyle they want, with automatic enrolment setting pension contributions at 8%, which is often just a starting point. Relying only on this default can lead to a shortfall, so experts recommend saving 12% or more of income for better retirement outcomes. This gap is made worse by increasing costs and a lack of preparation, highlighting the need for individuals to take more action to secure their financial future.