Half of the UK fears inadequate savings for retirement – Especially homeowners

It is hard to deny that the cost-of-living crisis and rising interest rates are having a substantial impact on households, but new research indicates that over half of UK pension savers are concerned they won’t have sufficient funds to retire.

Worryingly, this sentiment is shared by 39 per cent of homeowners who also grapple with rising mortgage and living expenses.

According to the Living Wage Foundation’s study, 34 per cent of homeowners worry they won’t even cover basic living costs in retirement.

The survey, which questioned over 3,000 working adults paying into pensions, revealed that eight per cent of homeowners had either reduced or ceased pension contributions in the six months leading up to February 2023.

Of the homeowners questioned, 54 per cent don’t think they will even be able to retire at all. This is closely aligned with the 56 per cent overall concern among all respondents.

In response to the low levels of retirement savings, the Living Wage Foundation is promoting the ‘Living Pension’ initiative.

This campaign aims to increase overall pension savings from the current target of eight per cent to 12 per cent by encouraging more employers to boost their contributions from the compulsory three per cent to seven per cent.

Regardless of whether their campaign succeeds, the findings of the study highlight the need for many savers to review their contributions to ensure that they can retire comfortably.

Whilst the current cost of living crisis has forced many of us to cut back, the impact of reducing pension contributions at this stage can be considerable as it can restrict the benefits of compound inflation over time.

If you require advice on preparing your finances for retirement, whether that is soon or in the future, speak to our team today.