Around one in three people could struggle to make ends meet in retirement, according to a report.
The average man is on track to receive £19,000 a year in retirement income per year, compared with £12,000 for the average woman, the report found. Many of those predicted to struggle in retirement expect to be still paying rent, Scottish Widows said.
Scottish Widows commissioned YouGov to survey more than 5,000 people across the UK in March and April 2023. They were asked about their preparations for retirement, and their expectations of life when no longer working.
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It also used retirement living standards levels set by the Pension and Lifetime Savings Association (PLSA) to calculate the quality of lifestyle that people are set to achieve in retirement.
The standards reflect different lifestyles in terms of the amounts that retirees will have available to spend on outgoings such as household bills, holidays and transport.
Scottish Widows' national retirement forecast (NRF) has been created to assess the potential retirement outcomes for people aged 22 to 65.
What did the results of the report say?
The research indicated that 35% of people are at risk of having less than the minimum needed in retirement, while a similar proportion (36%) are on course for a "comfortable" lifestyle, with enough money to cover various luxuries.
A further 18% are on course for a "minimum" lifestyle, covering the basics, with some money left over for non-essentials. And 11% are thought to be on track for a "moderate" lifestyle, which sits between the minimum and the comfortable levels.
The report also found that living expenses are a concern for three-quarters (75%) of people and just over a fifth (21%) are cutting back on essentials.
What is the DWP's response?
A Department for Work and Pensions spokesperson said: "Automatic enrolment has transformed pension saving with more than 10.8 million workers signed up to a workplace pension and an extra £33 billion saved in 2021 compared to 2012.
"We are supporting proposals to expand this so millions more save earlier, including young people, women and lower earners, while the free guidance on offer via MoneyHelper and Pension Wise is also helping people make informed choices about their financial futures."
How to check your State Pension forecast:
Anyone who is unsure about how much they can expect in retirement, can use the online ‘Check your State Pension’ forecasting tool on GOV.UK.
To use the service, you’ll need to prove your identity using Government Gateway. You’ll be able to register for Government Gateway if you have not used it before. The forecast will tell you how much State Pension you could get, when you can get it and how to increase it, if you can.
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