Single parents and renters join self-employed in retirement saving struggle

The HL Savings and Resilience Barometer shows 42.6% of households are on track to achieve a moderate level of income in retirement.

But there are some groups especially vulnerable to under-saving for retirement.

People who rent are less likely to be on track with their retirement planning. Only 20.2% of renter households were on track for a moderate retirement compared to 58.7% of homeowners.

Single parents are particularly vulnerable. Only 19.6% were on track compared to 48.8% of couples with children.

Just over a quarter (27.8%) of self-employed households are on track. This compares to 49.6% of employed households.

The PLSA standards say a single person would need a retirement income of £20,800 per year to achieve a moderate standard of living, while a couple would need £30,600.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “Saving for retirement is a challenge for most of us but there are certain groups who are struggling more than most, namely the self-employed, single parents and renters.

“The self-employed pensions gap is well known – they are not covered by auto-enrolment and many prefer to invest their money in other assets such as property instead.

“The prospect of putting money away that can’t be accessed until the age of 55 might prove too inflexible for someone managing income volatility – getting more saving into pensions will be a tough nut to crack.

“However, there are other key groups also particularly vulnerable to falling behind with their pension savings. 

“The latest barometer data shows only around a fifth of single parents and renters are on track to achieve a moderate income in retirement -way behind their married, mortgaged counterparts. 

“It shows anyone deviating from the traditional norms of getting married, buying a house, and working for an employer is going to face challenges when it comes to building up their financial resilience for later life.

“Self-employed people may well have built their wealth elsewhere – in property or other investments – renters and single parents are much less likely to have any such buffer.

“The idea of people entering retirement having paid off their mortgage is shifting. People are getting on the property ladder much later, or not getting on it at all. This all has a huge impact on their wider financial planning including pensions.