39% of People at Risk of Retirement Poverty, Warns Scottish Widows Report
A significant concern has emerged regarding retirement savings in the UK, with nearly two in five (39%) individuals at risk of failing to meet even their basic needs in retirement, according to a new report from Scottish Widows. This figure marks a worrying increase from 2023, when 35% were predicted to fall short of a minimum lifestyle.
Scottish Widows attributes this deterioration to stagnating pension savings amid rising living costs. Vulnerable groups—including low to middle-income earners, those under 40, LGBTQ+ individuals, people with disabilities, and members of black communities—are notably at a higher risk of inadequate retirement funds. Furthermore, part-time and self-employed workers face challenging prospects compared to their full-time counterparts.
Housing costs have emerged as a significant barrier, exacerbating the challenges of saving for retirement. Many individuals could find themselves managing mortgages or rents well into retirement, diminishing their ability to save during their working years.
Geographically, retirement outlooks vary across the UK. Northern Ireland and the North East of England have the lowest estimates, with just over half (52%) of individuals projected to achieve a minimum retirement lifestyle. In contrast, the East of England shows a more optimistic picture, where 68% are on track for basic retirement needs.
The findings, derived from a survey of over 5,100 respondents conducted by YouGov and in collaboration with Frontier Economics, underscore the necessity of targeted measures to avert retirement poverty. Pete Glancy, head of pensions policy at Scottish Widows, emphasized the importance of empowering individuals to make informed financial decisions for a secure future.
As these statistics reveal a looming crisis, it is imperative for policymakers and pension providers to act swiftly to improve retirement outcomes for millions across the UK.
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