Scottish Widows' 19th annual report found one in three Britons was facing hardship in retirement with those in their 20s "disproportionately" facing hardship when they gave up work.
The NRF uncovered significant polarisation among the amount people of different generations could retire on and that 36 per cent of savers were heading for a comfortable retirement compared to the 35 per cent projected to struggle.
It used the Pension and Lifetime Savings Association (PLSA)’s retirement living standards levels find out what levels of income people were set to achieve when they stopped working: it compared the retirement lifestyles within reach for different ages, ethnicities, genders and employment statuses, and included underrepresented groups such as disabled people and the LGBTQ+ community.
Scottish Widows claimed to have the most inclusive picture of UK savings to date. It found:
● Almost half - 43 per cent - of the people predicted to struggle in retirement expect to be still paying rent
● Rental costs amounted to 60 to 70 per cent of renters’ retirement income in several parts of the country, but this figure rose to 130 per cent in London
● Almost half of people currently in their 20s are heading for hardship in retirement, with an average retirement income of £10K among this group
● 43 per cent of Millennials are on track for a comfortable lifestyle, reflecting strong savings behaviours and the benefits of automatic enrolment
● On average, women will receive a third less income in retirement than men, £12,000 compared to £19,000 a year
● Half of Brits have not checked whether they are entitled to the full state pension.
Scott Gallacher, a chartered financial planner at director at Rowley Turton said the current cost of living crisis is casting a long shadow over future retirements, with the most affected individuals facing dire consequences.
He said: "As people grapple with the impossible choice between "heat" or "eat," they now also contend with rising rents and mortgage payments due to recent bank base rate hikes. In this climate, it's no surprise that pension contributions take a backseat. However, this neglect may unwittingly trap individuals in retirement poverty or render them unable to retire altogether. Immediate government intervention is crucial to spare people a lifetime of toil and secure their financial well-being in old age."
