New research by Censuswide, on behalf of the Money and Pensions Service, shows that 88% of members of Generation X, equating to around 12.3 million people, have not calculated how much income they are likely to need in retirement.
MAPS also highlights additional research by the International Longevity Centre, which shows that just 7% of members of Generation X who save into defined contribution pensions are saving enough to enjoy a moderate lifestyle in retirement.
The MAPS survey sought the views of around 2,000 people aged between 40 and 55. Despite the concerns over whether they are saving enough, or whether they understand how much retirement provision they need to make, the survey also found that many members of Generation X have clear ideas about what they would like to do in retirement. Things that survey respondents said they would want to do include:
- A trip to the seaside (mentioned by 42% of respondents)
- A meal out in a nearby restaurant (34%)
- A coffee with friends (33%)
- Gardening (32%)
- Entertaining family and friends at home (28%)
- A drink in their local pub (24%)
33% of those surveyed said that socialising would be prioritised over big ticket items such as luxury holidays.
In light of the Covid-19 pandemic, 73% said that it was now more important to spend time with family and friends, while 55% said they were making more of an effort to socialise with family and friends.
The ILC research shows that 39% of 40 to 55-year-olds say they have been negatively affected by the pandemic in some way. 27% report being furloughed or made redundant, and their pension planning being affected as a result. 27% also say that they now expect to retire later as a result of the financial consequences of Covid.
Carolyn Jones, a pensions expert at MAPS, said:
“Enjoying life’s little pleasures, like a catch up over a coffee with friends, has become more special than ever in recent months. But our research has served up a less than tasty truth that many of those currently saving for retirement could face having to cut back on the lifestyle they were expecting.
“The important thing is, it’s not too late to take action – and you don’t have to supersize your pension contributions to get back on track.”
Separate research from the Pensions and Lifetime Savings Association shows that 46% of the non-retired section of the UK population is unaware of the size of the current state pension.
It also found that 56% of pension savers are worried that they are not making sufficient contributions. Only 21% expressed confidence that they will be able to enjoy the lifestyle they desire in retirement.
75% of respondents so the PLSA survey said that they believed they would be able to afford to contribute more, with the average person saying they could save an additional £68 per month.
36% of those surveyed said they saw the state pension as their main source of retirement income. This rose to 49% amongst the 55 to 64 age group.
33% said that they would seek professional advice when the time came to access their retirement savings.
Yonder Consulting surveyed around 2,000 people, all of whom are yet to retire, on behalf of the PLSA.
Nigel Peaple, Director Policy & Advocacy, PLSA, said:
“It is striking that so many people do not yet know the basic elements of pension saving, such as how much the State Pension is worth, how much they need to save, and the choices they must make about how to draw their pension at retirement.”