People nearing state retirement age are reportedly saving less than any other age group in the UK, according to research conducted by investment, protection, retirement and in-house advice specialist, LV=.
Data produced in LV’s Wealth and Wellbeing Research Programme reveals people aged between 55-64 are saving less than ever before (31%) and are more likely to have dipped into their existing savings pot (24%), compared to all other age categories.
The research also highlighted that just over a quarter of people (26%), surveyed across all age groups, blame the rising cost of living as a key reason for cutting back on their savings.
Despite facing increasing financial pressures, almost three in 10 (29%) respondents had never researched or sought professional advice about their finances – up 6% from December 2023. This rises to 38% for households earning under £25,000 but drops to 19% for those with incomes over £100,000.
The research uncovered more critical insights about the nation’s finances, including the following highlights.
More than half of non-retired UK adults express retirement savings fears
According to LV’s findings, more than half (54%) of non-retired UK adults surveyed are concerned they won’t have enough money saved for a comfortable retirement.
Gender differences also appear to have an impact in this respect, with women (53%) appearing significantly less confident than men (40%) about having enough money put away for when they retire.
Just under four in 10 adults ‘drowning’ in financial information
38% of those surveyed said they felt overwhelmed by the volume of financial information available on the internet, social media and other outlets, while almost a third (32%) were confused by the information they had found.
Nevertheless, more than half of respondents (54%) said they felt empowered to make financial decisions, while 64% were confident they have access to reliable financial information and 58% said they knew which sources to trust.
Professional advice boosts retirement confidence in majority of people
Almost three in five UK consumers (59%) who’ve seen or regularly seek financial advice are more confident about their retirement plans than those who don’t (37%). This suggests a significant portion of UK adults could be uncertain about both their retirement and pension options. This highlights how seeking professional financial advice can help people prepare for retirement and ensure they have sufficient savings to avoid running out of money in later life.
LV’s research also revealed that those who had sought financial advice were significantly more likely to take actions to prepare for retirement than those who had not. For example, 30% of people surveyed who pay into a workplace or personal pension and use advisers enjoy benefits such as employer contributions and tax-free personal allowances, while only 13% of those who don’t use advisers are doing this.
Workplace or personal pensions remain the most popular source of retirement income
Workplace or personal pensions remain the most popular method of retirement saving and have done so every quarter since September 2023. 44% of those surveyed said this was still the case, while 39% plan to use their savings and investments, 19% aim to rely solely on the State Pension, and 16% plan to live off their partner’s pension(s).
Meanwhile, 9% of those surveyed said they plan to use the value in their home to fund their retirement by either downsizing or buying equity release. Equity release allows people to borrow cash tied up in their home without having to move or sell the property.
Marc Perry, Advice and Consumer Channel Director at LV=, said:
“Saving for retirement can be complex for people of all generations.
“Whether you’re just starting out in your career or are ready to give up work, it’s never too late to review your finances and consider the options open to you.
“Planning for retirement can be a lifelong journey and we would always recommend seeking expert financial advice to ensure you have enough money saved for retirement to ensure a secure and comfortable future”.
From boosting retirement knowledge to exploring investment options, seeking professional pension and retirement advice can offer a range of benefits to help people feel financially confident in retirement.
