A moderate retirement is within reach for about 41.7 per cent of households, a decrease from 42.6 per cent in July, according to Hargreaves Lansdown.
According to the HL Savings and Resilience Barometer shows that only 11.6 per cent of households in the lowest income quintile are on track which is similar to the 11.7 per cent recorded in July.
Nearly 71.1 per cent of households earning in the top five percentile are on track for a modest retirement. This is a decrease from 71.8 per cent six months ago.
Less than one-third, or 32.3 per cent, of middle-class earners were on course for a modest income, which had the greatest impact. This is a decrease from 34.5 per cent six months ago.
Hargreaves Lansdown senior pensions and retirement analyst Helen Morrissey says: “Our retirement resilience is showing serious signs of slipping as the cost of living continues to play havoc with our finances. As more people struggle to pay their day-to-day bills this has a knock-on effect to the amount we can afford to put away for tomorrow. Added to this, soaring energy and food prices have pushed up the cost of living for a moderate income in retirement according to the Pensions and Lifetime Savings Association – it’s a miserable situation.
“No-one escapes unscathed. Only 71.1 per cent of the top-fifth earning households are on track for a moderate income in retirement. This may seem high but given they are the highest earners it’s highly likely that a moderate income will not meet their expectations in retirement and so many are in for a nasty shock.
“Middle-earning households have seen the largest falls with less than a third (32.3 per cent) now on track for a moderate income. This has fallen from 34.5 per cent – it may feel like a relatively small fall but given it has happened over the course of just six months it is concerning. There are signs high inflation is starting to ease but the likelihood is we will be feeling the financial pain for some time to come.
“The state pension is due to rise by 10.1 per cent from April -this will cover some of the increase but not all of it – the rest will need to be made up from increased savings, but the reality is that right now many people are in no position to boost pension contributions.
