Press Article: Pensions Crisis Deepens as Retirement Outlook Worsens for UK Adults
Recent research from Scottish Widows reveals that nearly two-fifths of UK adults (39%) are not on track for a basic retirement lifestyle, an increase from 35% last year. This alarming trend could signal a rise in retirement poverty, affecting an additional 1.6 million individuals.
The study surveyed over 5,000 adults and found that while pension savings have grown—projected retirement income rising to £17,200 from £15,500—50% of respondents are aware they are not saving sufficiently. A notable 69% reported feeling financially independent, but a quarter expressed otherwise. Additionally, 44% do not believe they will ever achieve financial independence.
Among younger adults, a quarter of those in their 20s prioritize saving for emergencies, with goals including house deposits and holidays. Thirteen percent reported being unable to save at all. Those in their 30s earning between £20,000 and £35,000 tend to contribute the minimum 8% to their pensions, leading to an average 60% income drop in retirement; 70% may see their income halved.
Pete Glancy, head of pensions policy at Scottish Widows, emphasized the urgent need for targeted policy measures to combat impending retirement poverty. He advocated for a comprehensive approach in the government’s Pensions Review, highlighting critical areas needing attention: auto-enrolment, self-employed contribution rates, and housing.
Paul Leandro, partner at Barnett Waddingham, echoed these concerns, noting that rising living costs and low contribution rates leave millions unprepared for retirement. He warned that without decisive action, the UK faces a significant pensions crisis.
As the landscape shifts, it is vital for individuals to feel financially empowered to make informed decisions for their future. A collaborative effort from all sectors will be crucial to prevent a retirement funding crisis.
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