One quarter expect a financial struggle in retirement

Just under a quarter (23 per cent) of people believe their retirement is likely to be a financial struggle, according to new research from Aviva.

In its Retirement Reality report published today, 28 November, 31 per cent of people said they will have enough money to get by, while 18 per cent believe they won’t have enough to do everything they like.

Furthermore, just 32 per cent said saving for retirement is one of their top financial priorities, despite having generous retirement aspirations, highlighting the difference between dreams and reality for people facing retirement.

Aviva head of savings and retirement, Alistair McQueen, said: “Our research has shown that the retirement dream may not be the retirement reality for many people. Travelling the world is clearly a goal for some people, but if you’re not prioritising saving for retirement, that dream trip may never come true.

“We know people are facing many financial pressures, which often make saving more difficult. But saving into a pension should be aspirational. We need to remind ourselves that we are putting aside money for a better life in the future."

Just 19 per cent of 22 to 30-year-olds see retirement as a top financial priority, compared to 54 per cent of 56 to 66-year-olds.

Aviva added that auto-enrolment is unlikely to give people the pot they need, despite the increase to 8 per cent in April 2019, and called on the government to introduce a 12.5 per cent minimum by 2028.

According to the group, savers should start saving 40 years before they hit retirement, aim to save at least 12.5 per cent of their annual salary and have at least 10 time your annual salary saved by the time you reach retirement.

“Retirement should be something we all look forward to, but we should be aiming to thrive, not just survive. To make the retirement of our dreams a reality the planning starts now,” McQueen added.

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