Just under one in five (19%) of employees aged between 32 and 40 feel completely or somewhat prepared in terms of how they will fund their retirement, according to new research.
Pension provider Aviva worked with UK economics consultancy WPI Economics on its new report Planning for retirement in the 2050s. It analysed the challenges facing those who are set to retire in the 2050s, aged 32 to 40 today, and explored the support and policies they need to manage their wealth in later life.
The research revealed that a typical middle-income earner in this age group who contributes 8% of earnings into a defined contribution pension throughout their working life could retire with a pension pot of £225,000 or more in the 2050s. Furthermore, a typical middle-income earner paying an extra 2% into a pension each year could increase their total pot by £56,000 by the time they retire.
In addition, 64% said they do not know how much they need to save into a pension to realise their desired retirement income level, and 52% would not know where to start when it comes to planning for their retirement.
The majority (72%) of UK adults yet to retire want unbiased advice, but just 10% of those on middle incomes set to retire in the 2050s have taken advice.
Doug Brown, chief executive officer of UK and Ireland Life at Aviva, said: “The vast majority will need financial advice, and everyone will need robust, well-designed professional support in their decision-making and planning, but the majority say they have no idea where to begin. Despite this, there is no clear vision of the support people need, and consequently policy is piecemeal and insufficient, leaving savers at risk from poor decisions.
“Government, regulators, and industry need to work together to develop a blueprint of the support that pension savers need and take steps to put that support in place, so future retirees are able to make better decisions and achieve more positive retirement outcomes.”