How confident are you about saving for your later years?
New figures showing how the population is set to age in the years to come have prompted fresh concerns about whether people are saving enough cash to last them through their retirement.
More than one in 12 people in the UK will be aged 80 or older in 24 years’ time, according to projections from the Office for National Statistics (ONS).
While the proportion of people of working age is expected to shrink from 62% in 2014 to 58% by 2092, the share of people of pension age is predicted to swell from one in five (19.2%) in 2014 to one in four by 2092.
These projections have led pension experts to warn that not only will people of working age need to save more in order to spend what could be decades in retirement, they may also have less money to pass down to their children and grandchildren.
So how confident are people in their ability to prepare for a decent retirement?
A survey of 3,000 people aged 18-75 has found an “expectation gap” between those who are already retired and those still working.
The research, from Skipton Building Society, found that just one in three (34%) who are currently of working age are confident they’ll be able to live the lifestyle they want in retirement.
This compares with two-thirds (65%) of those who have already retired, who are confident about living the lifestyle they want.
A lack of money or income was the main reason given by retirees not living the lifestyle they want, followed by poor health.
While two in five (39%) retired people surveyed believe they are now living the best days of their lives, just one in six (17%) still working predict they’ll say the same when they retire.
Current pensioners are also doubtful about the prospects of future generations, with only one in six (17%) believing the next generation’s retirement will be better than their own.
Meanwhile, three-quarters (74%) of current pensioners think their standard of living is good, if not better than that of their parents’.
While 64% of people who have already retired were able to stop work when they wanted, only 29% of those currently working expect to be able to do the same.
The survey found that generally, people aged 35-44 appeared to be more pessimistic about their retirement prospects than twentysomethings.
People aged between 45 to 54 also tended to be the most likely to feel their preferred retirement lifestyle is out of reach - with many people in this age group juggling retirement plans with other family expenses.
Jacqui Bateson, a retirement specialist at Skipton Building Society, says: “Retirement is a rapidly growing concern as people are living longer and will need more money for later life.
“We’ve identified that there is a clear period from 35 onwards when people can see the future realities of retirement in years to come, but can’t see past their immediate concerns and financial commitments, such as children and mortgages.
“However, we can also see that the best solution is not to put your head in the sand, but to take action.”
Skipton’s research found that 79% of people that are happy with their retirement took active steps to prepare for it.
Interestingly, a separate report has found the wealthiest people are not necessarily the most confident about their future retirement.
The survey of 1,000 people aged over 50 from AXA Life Invest found that higher income earners were only marginally more confident in their retirement plans than middle income earners, at 62% compared with 56%.
Overall, a household income of £39,091 a year tends to be the “tipping point” for retirement confidence, the research found.
AXA found retirement confidence appeared to be strongly linked to the amount people regularly saved each month towards their later years.
Simon Smallcombe, managing director of AXA Life Invest, says the research “suggests that those who plan for the future and squirrel away consistent savings each month can be just as confident as high earners. Happiness and contentment in your golden years isn’t dependent on wealth alone”.