Workers aged 50-years-old plus are relying on downsizing, an inheritance or even a lottery win to be able to afford a comfortable retirement, research by Aviva showed.
According to Aviva’s Real Retirement report, which polled 3,327 UK adults, a quarter of the older workers are hoping to profit from downsizing to a smaller home or moving to a cheaper area.
A similar number of respondents are relying on receiving an inheritance to achieve a comfortable standard of living in retirement.
The research also showed that more than one in 10 (13 per cent) of the over-50s workers said they are relying on a lottery win to afford a comfortable retirement, despite the odds of winning the National Lottery being just one in 45 million.
According to Lindsey Rix, managing director for savings and retirement at Aviva, everyday financial pressures are making these workers postpone retirement planning.
They are “instead relying on factors other than savings – many of which are outside of their control – to afford a comfortable retirement,” she argued.
She said: "Even those options that might seem guaranteed, such as making a profit from selling a home, could pose a challenge should economic or market conditions change."
The over-50s workers are expected to reach their peak earnings – or the highest amount of income earned during their lifetime – at the age of 51 on average, with this period lasting for an average of five-and-a-half years.
This potentially provides a vital window of opportunity for people to boost their pension savings ahead of retirement, the provider stated.
If a saver was to put away an extra £100 per month into their pension for the full period of peak earnings from the age of 51, this could translate to a £25,000 boost to their pension pot at retirement, analysis from Aviva showed.
Although a third of older workers save more during this peak earnings period, a fifth say they have or would spend it on big one-off purchases such as a new car, kitchen or extension.
A similar proportion (20 per cent) have or would spend more on everyday living and enjoying themselves.
The research also showed only 12 per cent say they have or would increase contributions to an existing workplace pension during this time, increasing to just 14 per cent among those who expect to retire within the next two years.
Ms Rix said: “Wherever possible, retirement saving shouldn’t be left to chance.
“Although older workers have multiple demands on their income, taking time to understand what needs to be saved in order to afford a good standard of living in retirement and putting more away each month – no matter how small the increase – can make a big difference.”
Aviva’s research showed that almost a quarter of the respondents have yet to take pension saving seriously.