Quarter of savers believe their current level of pension saving won’t be enough to live off

Over a quarter of savers (26%) who have a workplace pension think that their current amount of pension saving will not be enough to get by on when it comes time to retire.

The survey by the Pensions and Lifetime Savings Association (PLSA) found that those aged between 35 and 54 (29%) were most concerned that they wouldn’t have enough to live off, compared to those aged over 55 (20%). Just under a third of women were concerned (31%), compared to one in five men (21%).

Furthermore, 35% of those in low-income households – whose total income is up to £14k – and 31% with an income £14k – £28k stated their concerns. This figure drops to just one in five (20%) for those in households with an income of over £48k.

Retirement living standards

One in five people surveyed (21%) – who have a pension – say that they save into a pension to ensure that they have a minimum standard of living in retirement; a pension that meets all their basic needs.

A majority of people save to get either a moderate (41%) or comfortable (33%) retirement living standard.

However, far fewer people think their current pension saving will achieve this with slightly over a quarter (27%) saying moderate and just 14% comfortable.

Nigel Peaple, director of policy & advocacy at PLSA, said: “We have long argued that current contribution levels are not likely to give people the level of retirement income they expect or need.

“As the Government seeks to ‘level-up’ the economy, narrowing wealth disparities between regions and different demographics, we think now is the right time for the Government to commit to levelling up pensions, gradually, over the next decade, in three affordable steps.

“First, the Government should implement its plans of extending pension savings to the over 18s, and commence pension saving on each pound of savings, from the mid-2020s.

“Then around the end of the decade, pensions should be “levelled up” so that employers match employee contributions.

“This would mean 10% of pay goes into pensions but would not require extra contributions by workers. Finally, when affordable, in the early 2030s, contributions should be increased to 12%.”