More than one in four (28%) UK adults do not know how much income they will need in retirement, according to new research from Scottish Widows.
Data from its soon to be published 2024 Retirement Report shows that across all age groups, 28% are uncertain about their retirement income needs.
One in five (21%) of those aged 50 and over still have not calculated how much income they will need when they stop working.
On average, people believe they will need just over £29,000 annually for a comfortable retirement.
However, tracking this against Scottish Widows’ National Retirement Forecast suggests that only 43% of people are on track to achieve this income.
The report highlights a concerning reality that only a third (34%) of people think they are adequately preparing for retirement, increasing to 40% among those aged 60-64.
Among those approaching retirement, 54% expect to retire later than they would like, and 64% worry they will run out of money in retirement, compared to 38% of today’s retirees.
There is a clear need for greater engagement among those approaching retirement, as half of people in their 50s and early 60s have still not researched how much they might need to save.
While more than four in 10 (43%) future retirees expect the State Pension to provide a modest or significant part of their income in retirement, it forms a significant proportion of income for 46% of people.
Consequently, 45% of those polled are concerned about changes to the State Pension, and more than one in 10 (12%) future retirees do not expect it to be available when they retire.
Peter Glancy, head of pension policy at Scottish Widows, said: “Expectation versus reality when it comes to retirement income shows how vital it is to help people – especially those on the verge of retirement – build a clearer picture of what their own lives could look like when they stop working, and what they can do now to achieve the best outcomes.
“There are lots of tools available to help people get to grips with pension basics and work out the right steps to take to boost their retirement income, and the earlier we start thinking about our pensions as part of our everyday finances, the more we can do to close that gap.”
