UK savers doubt financial freedom in retirement

20 September 2024

Written by Retirement Line

Fewer than half of UK adults feel assured they’ll have financial freedom in retirement, according to new research by Continuum and YouGov.

The study shows that people aged 45 to 54 are the most worried, with just 29% confident in their retirement finances. By contrast, 53% of over-55s feel more secure.

Gender and marital status also play a role. Men (46%) are more confident than women (40%). Married individuals or those in a civil partnership (53%) feel more secure than singles (28%).

Regionally, Londoners (47%) are the most optimistic, while those in the North, East and Northern Ireland are the least confident (42%). 

A third of respondents across most regions fear they won’t be able to maintain their current lifestyle in retirement, which is important to 81% of those surveyed.

Under-saving is ‘one of the UK’s biggest challenges’

Martin Brown, managing partner at Continuum, commented: “Under-saving for retirement remains one of the UK’s biggest challenges with many Brits failing to save enough to maintain their current or desired lifestyle.”

He added: “There is still a lot of work that needs to be done if the majority of workers are to feel prepared for when they leave the workforce.”

Half of women say they won’t have enough income for retirement

In a separate but similar study by Fidelity International called ‘Women and Money’, the data reveals that over half (52%) of UK women do not believe they will have enough money to sustain their income in retirement.

The study found that 12% of women have reduced their pension contributions, cutting back by an average of £173 a month. This reduction is largely driven by the current cost of living crisis, with 51% of women citing a lack of available funds after covering essential expenses as a barrier to saving more for retirement.

Jackie Boylan, head of investor servicing at Fidelity International, said: “The most recent data underscores the stark reality many women face as they navigate a complex financial landscape.” 

She added, “The cost-of-living crisis has resulted in many women prioritising their most immediate financial needs, putting their longer-term financial future at risk.”

While 22% of women surveyed redirected their funds toward other savings goals, 12% were uncertain about the most effective strategies for retirement saving. 

In response to the findings, Fidelity International suggests that savers can take steps to better manage their long-term finances. Their analysis reveals that a 45-year-old person with an annual income of £28,765 could enhance their retirement savings by £17,000 by increasing their contributions by just 1%. 

By raising their contributions by 3%, their savings could grow by an additional £51,100, and a 5% increase could lead to an extra £85,200 in retirement savings.

Sources: 

Fewer than half of UK adults believe they’ll have financial freedom in retirement: Less than half of savers confident about financial freedom in retirement. FT Adviser. Accessed 05 September 2024.

Over half of UK women do not believe they will have enough money to sustain their income in retirement: Half of UK women unsure they have enough for retirement. FT Adviser. Accessed 05 September 2024.