Just over half (56%) of respondents are saving enough money for their retirement, according to research by Scottish Widows.
The annual Scottish Widows retirement report, which surveyed 5,151 UK adults, also found that 18% of respondents are not saving for retirement at all.
The mean age at which respondents feel they could comfortably afford to begin saving for retirement is 29.3 years old, and the age at which respondents would like to retire is 62.5 years old. The average income respondents believe they need for a comfortable retirement has risen to £23,990, up from £23,254 in 2015.
The research also found:
- 58% of respondents believe they will not be able to save any more in the next 12 months than they are already.
- 24% of respondents rely on defined benefit (DB) pensions for their retirement income, compared to 28% in 2015.
- Excluding those with a DB pension, 43% of respondents are saving adequately for retirement. This compares to 39% in 2015.
- 53% of respondents aged 40-49 years old are saving an adequate amount for retirement, down from 57% in 2015. Almost a fifth (19%) of respondents in their 40s are not saving for their retirement at all, compared to 16% in 2015.
- 21% of respondents feel optimistic about their pension following the outcome of the European Union (EU) referendum result, compared to 31% before the vote.
- 43% of 18-24 year old respondents feel pessimistic about their retirement after the vote for Brexit, up from 27% beforehand. More than a quarter (26%) of 18-24 year old respondents believe they will save more money for retirement as a result of the vote for Brexit.
- 53% of respondents believe Brexit will not affect the amount they save for retirement, and 11% believe they will be able to put away less money as a result.
Robert Cochran, retirement expert at Scottish Widows, said: “With three solid years of improvement behind us, it is disappointing to see that savings levels are starting to plateau. Particularly worrying is the fact that savings levels among those in their 40s drop off at a time in life when retirement may be within 20 years.
“The light at the end of the tunnel in this picture is the long-term impact of auto-enrolment, which is clear to see from our 12 years of research. Auto-enrolment has already brought six million new workplace savers into pensions and with the minimum contributions for employers and employees set to rise in coming years, we expect average levels of savings [will continue to rise].
“Critical to maintaining this trend will be encouraging people to save more than the minimum contribution, as well as providing the right support to those who are not covered by auto-enrolment.”
