If your retirement plan currently consists of “something will turn up,” you’re in good company. But that’s not exactly a comfort.
A new report has found that three quarters of UK workers are not saving enough to retire on what’s considered a moderate income, raising fresh alarm about the state of the nation’s pension pots. The figures, published this week, put a moderate retirement lifestyle at £32,700 a year for a single person and £45,400 for a couple. That’s not champagne and cruises. That’s a decent car, a holiday, heating you don’t feel guilty about turning on.
The numbers come from the Pensions and Lifetime Savings Association’s Retirement Living Standards, which breaks down what different income levels actually buy you in later life. At the moderate tier, you’re looking at a fortnight abroad each year, regular social outings, and replacing the odd appliance without a spreadsheet crisis. It’s not extravagant. It’s just comfortable.
And yet, for most workers, it’s out of reach.
The shortfall isn’t just a problem for low earners. Middle-income households are being squeezed too, particularly after years of rising living costs have made it harder to contribute consistently. Auto-enrolment helped get millions into workplace pensions, but the minimum contribution rate of 8% of qualifying earnings simply isn’t enough to close the gap for most people.
“The minimum isn’t the target. It’s just the floor,” one pensions consultant put it bluntly. “People treat it like a destination.”
For younger workers, the maths is slightly more forgiving; time and compound growth are powerful allies if you start early. But for those in their 40s and 50s who haven’t been contributing seriously, the window is narrowing fast.
There’s also a gender dimension worth flagging. Women, who are more likely to have taken career breaks or worked part-time, consistently retire with smaller pots than men. The retirement income gap between the sexes remains stubbornly wide.
The government has signalled reforms are coming, including extending auto-enrolment to younger workers and removing the lower earnings threshold. Whether that’ll be enough to shift the dial meaningfully remains to be seen.
The real question, perhaps, is not what the policy says, but what you’re actually going to do about it this month.
