Almost half of UK workers believe current economic challenges will make it harder to retire ‘comfortably’ while one in three now expect to work beyond retirement age.
This latest survey by Smart Pension suggests an escalating retirement crisis, which highlights growing concerns over inadequate savings, deepening economic pressures, and widening inequalities in retirement security across the country.
As a result Smart Pension is calling for the Government to reboot the second phase of the pensions review, looking at savings adequacy. It also wants to see a commitment to raising employer AE contributions within this Parliament.
Its survey shows lower and middle earners are among the most uncertain about future retirement prospects. While 40 per cent of those earning under £25,000 expect to work into retirement, this figure is also high (31 per cent) among those earning between £25,000 and £50,000. This figures drops to just 17 per cent for those earning over £150,000 a year.
As the cost-of-living crisis continues to impact households across the country, the research also found that many savers are struggling to balance immediate financial pressures with long-term planning. Over a third of savers (35 per cent) said they have considered pausing their workplace pension contributions — a trend that is more pronounced among younger generations, with 38 per cent of Gen Z and Millennials contemplating this move compared to 23 per cent of Gen Xers. The survey also found that women are feeling impact of these economic challenges more acutely.
Regional disparities in retirement confidence are also evident. Londoners are more optimistic about their financial future, while those in the North West report the lowest levels of confidence, with only 1 in 14 expressing certainty in their ability to retire comfortably.
At the same time, knowledge gaps about pensions remain widespread. While 80 per cent of all respondents are aware of the State Pension age, only 58 per cent of Gen Zers know when they will be eligible for this benefit.
This gap narrows as workers approach retirement, but even among those aged 45-49, 15 per cent remain uncertain about when they will receive their pension entitlement.
Smart Pension chief executive Jamie Fiveash says: “We are sitting on a pensions timebomb: workers are simply not saving enough to retire at all, not just comfortably. People across the UK are ageing at a time of rising social and acute economic pressures. We cannot afford to kick this can down the road any longer and need to take concerted action to improve the quantity and quality of people’s savings.
“We need the Government to think again about cancelling the second phase of the pension review and suggest that, within this Parliament, a commitment to increasing employer contributions must be made.”
