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Have you ever thought about what you’ll do with your life when you’re done working? Do you see yourself spending your days in a big house in the English countryside, sipping cold drinks on a Spanish beach or running off somewhere more exotic?
It’s never too early to start thinking about how to save for one’s retirement and to compare pension options. Depending on whether you also need to pay the rent, and what you want your final years to look like, it may take more money than you think to live them comfortably. We took a look at the figures.
Key statistics
- 35% of the adult population say they don’t have a pension.
- 43% of the population admit they don’t know how much they will need.
- Over half (55%) of people estimate that up to £100,000 is enough to retire comfortably.
- Only 28% of people think they are on track to meet this.
- The recommended amount for a comfortable retirement is £260,000–£445,000, depending on accommodation costs.
How many people have a pension?
Despite automatic enrolment workplace pensions being put in place in the UK, only 65% of survey respondents said they had a pension, equating to 33.4 million people. This means 35% of people, in other words 18.4 million Brits, either have no pension or are unaware that they have one. Of those who said they did have one, 36% weren’t sure how much was in it.
How well could people estimate the size of a good pension?
When asked to estimate what a healthy pension pot looks like, 43% of people said they didn’t know. Of those that did estimate, the average response was £174,000, and 55% of people thought up to £100,000 would be enough. This is significantly below the amount recommended by Royal London: £260,000–£445,000.
Age differences
The table below shows some of the key differences we found in responses based on age group.
| Millennials | Gen X | Baby Boomers | |
|---|---|---|---|
| Percentage of population who say they don’t have pension | 55% | 33% | 24% |
| Percentage of population who are not sure how much pension they have | 32% | 44% | 32% |
| Average estimated amount in current pension | £9,912 | £60,135 | £111,427 |
| How much people think they need to retire comfortably | £126,405 | £188,291 | £211,820 |
| Percentage of population who think they are on track to achieve their minimum pension amount | 20% | 25% | 41% |
| Percentage of people who think 50k is enough to retire comfortably | 32% | 25% | 19% |
| Actual amount need for a comfortable retirement for those still renting | £445,000 | £445,000 | £445,000 |
Pension predictions by age group
As you might expect, pension estimates varied by age, with older age groups predicting what they’ll need more accurately. In fact, almost a third (32%) of millennials thought up to just £50,000 would be enough. Even the oldest age group was underestimated by over £40,000, or even more than this if they’re still renting or paying off a mortgage.
Do people feel on track to save up a good pension?
Disturbingly, the majority of people in every age group did not feel on track to have a good pension by the time they retire. This is even more concerning when you take into account that most of their estimates of what they’ll need were significantly below the recommended figure.
Gender differences
| Male | Female | |
|---|---|---|
| Percentage of population who don’t have pension | 32% | 39% |
| Average estimated amount in current pension | £70,000 | £45,000 |
| How much people think they need to retire comfortably | £169,000 | £178,000 |
| Percentage of population who are not sure how much pension they have | 31% | 42% |
| Percentage of population who think they are on track to achieve their minimum amount | 34% | 22% |
Estimated current pension compared to predicted amount needed
It seems men, in general, are more likely to meet their pension requirements than women, with the average male participant of our study having an estimated £70,000 in his pension pot, compared to £45,000 in the average woman’s. This is despite women having a higher, and therefore more accurate, prediction of what a good pension should be, at £178,000, £10,000 more than the average man’s prediction.
“It’s often not a priority at a younger age, but the cost of retirement for millennials is something to be prepared for, especially as this generation is also expected to contend with the cost of rent or a mortgage on top of the general cost of living in their retirement. It’s also concerning to learn that so many baby boomers are still yet to look into it. Our study revealed that almost a quarter (24%) of this generation do not yet have a pension.
Employers must legally provide a workplace pension in the UK so it’s important that employees in the UK are aware of what they’re eligible for, as well as looking into a private pension to top up their pot.”
– Jon Ostler, UK CEO at finder.com
Methodology
We calculated these figures using a survey of 2,000 British adults commissioned by finder.com and conducted by research provider OnePoll in June 2018.
Recommended pension sizes are based on analysis by Royal London.
For all media enquiries, please contact
Matt Mckenna
UK Communications Manager
T: +44 20 3828 1338
UK Communications Manager
T: +44 20 3828 1338
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