New research has found millions of UK workers fear they will not have enough money to fund their preferred standard of life in retirement.
The study by Avia found 58% of non-retired people aged 45-60 are worried they will not have enough money to provide an adequate standard of living when they end their working life, yet over a fifth (21%) of those who responded admitted they are not taking action to strengthen their retirement income.
The underwriter said they believe the current economic downturn is likely to prompt many people of all age groups to reassess their plans and look for ways to help alleviate financial strain intensified by the pandemic.
Those aged 35-44 (25%) are least likely to be taking action to improve their retirement finances, the research shows. This compares with 14% of consumers aged 18-24, the lowest percentage of any age category.
Alistair McQueen, Head of Savings and Retirement at Aviva, said: “The high levels of uncertainty caused by the coronavirus pandemic are likely to prompt many people to urgently assess their financial outlook on the journey through mid-life to retirement.
“Although uncertainty can be unsettling, people can seek reassurance by taking steps to better understand their current position and identify practical ways to tackle the challenge ahead.
“Some groups have been particularly hard hit by the pandemic, and even before coronavirus, self-employed workers often struggled to save for retirement due to the often uncertain nature of their employment. It is vital we do all we can to support them, including addressing the need for tailored financial guidance.”
The findings come despite widespread concern that many people will struggle to fund their needs in later life. Those non-retired and aged 35-44 are most concerned about their level of retirement finances (66%), followed by those non-retired and aged 45-54 (59%), suggesting that transitioning from ‘mid-life’ to ‘retirement’ may become even more challenging for the next generation of retirees.
Only one in ten (11%) people aged 45-60 are planning to increase their pension contributions in the future, although more than one in six (17%) in this age group have said they think will need to work for at least six months or more past their retirement date, or they cannot see a situation where they can think about a retirement date.
Aviva research also suggests that self-employed workers are less likely to prepare for their retirement, with almost one in four (23%) not taking steps to ensure they have adequate income for later life. This compares to 13% of those in full-time work.