Over a fifth of over 40s not yet saving for retirement

Over a fifth (22%) of those over the age of 40 said they have not yet started saving for their retirement, according to a survey conducted by Equity Release Supermarket (ERS), despite almost half claiming that they want to travel regularly in their “golden years”.

In its Retirement Reality Report, the ERS found that one in three believed that their standard of living will likely get worse in retirement, while more than half (51%) said their level of disposable income will decrease.

Furthermore, the organisation revealed that 6% of respondents reported that they do not ever expect to retire, with the smallest chunk of those being over 70 (12%), compared to 56% of those aged between 40 and 50.

The survey highlighted that just a quarter of respondents said they had an idea of how much they were expected to live on in retirement. However, “reassuringly”, nearly half of them said they felt fully or somewhat prepared for retirement.

Commenting on the figures, ERS marketing director Dom Wilkinson said: “To live comfortably in retirement now, an individual needs to supplement a full state pension with about £12,000 per year. For a 20-year retirement, this amounts to a pension pot of £240,000. The reality is that the average pension pot is little over £30,000. Where do we think we’ll find the missing £210,000?"

Of the proportion of people who feel somewhat or fully prepared for retirement (roughly 28% of the overall sample), 59% said they do not know how much money they are expected to live on, 29% have no additional provision in place beyond their state pension, and 71% have not consulted a financial adviser. Therefore, one might question what that sense of “preparedness” is based on.

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