A pension pot of £100,000 would run dry within just four to five years for someone living at a moderate standard in retirement, Skipton Building Society has warned.
The building society’s research reveals a troubling disconnect between expectations and reality among older savers.
Nearly one in seven people aged 65 and over believe that £100,000 would be enough to fund their ideal retirement.
This figure falls dramatically short of what is actually needed, even when combined with the State Pension, according to analysis based on the Retirement Living Standards.
The findings come amid growing concerns about later-life finances as living costs continue to rise. Reports suggest one in six retirees are being forced back into work.
The research found that 38 per cent of adults have given almost no thought to their retirement, despite mounting evidence that poor preparation is pushing older workers to delay leaving employment.
Among those aged 65 and over, 17 per cent admitted they have no idea how much they pay into their pension each month. Yet more than a third of this age group, some 39 per cent, expressed concern about their savings running out.
The disconnect between awareness and anxiety suggests many people are avoiding the details of their financial situation while still fearing the consequences.
The research found that 38 per cent of adults have given almost no thought to their retirement
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PA
Skipton’s findings indicate that working beyond traditional retirement age is increasingly becoming a financial necessity rather than a personal choice.
The building society noted that no other age group had such low expectations for their retirement fund as those already at or past pension age.
Younger generations show even higher levels of disengagement, with 61 per cent of Gen Z admitting they have not seriously considered their retirement plans.
Despite this lack of preparation, Gen Z workers have far grander expectations for their pension pots. More than one in ten anticipate needing between £1million and £1.09million to fund their later years, with 18 per cent of over-65s hoping to travel the world in retirement.
Skipton’s findings indicate that working beyond traditional retirement age is increasingly becoming a financial necessity
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GETTYHowever, a third of Gen Z respondents could not say how much they currently contribute to their pension each month.
A similar proportion of all those surveyed, 33 per cent, hold the mistaken belief that they will require less money as they grow older. This assumption persists despite the ongoing rise in living costs.
The research suggests retirement denial is not confined to any single generation but spans the entire adult population.
Helen McGinty, head of financial advice distribution at Skipton Building Society, said: “With many not knowing how much they’re contributing each month to their pension, yet worried about not having enough money, it’s time to wake up to the reality that those dreams won’t happen without planned and considered action.”
Skipton suggests that achieving a comfortable retirement may require pension savings exceeding £200,000
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GETTYShe added: “The earlier you start planning, the more options and flexibility you’ll have later on. It’s also important to think carefully about how your retirement savings will support you throughout your lifetime, especially as health and lifestyle needs change.”
Skipton suggests that achieving a comfortable retirement may require pension savings exceeding £200,000.
The building society provided illustrative figures showing the monthly contributions needed to reach various targets.
Someone starting at 30 would need to save roughly £89 monthly to accumulate £100,000 by age 65, rising to £168 from age 40 or £375 from age 50.
