Retirement Income  

Millions of savers unaware of retirement needs

Millions of savers unaware of retirement needs

Almost 9m employees aged 45 and over don’t know how much they will need to save to afford a comfortable retirement, according to Aviva.

A poll of 1,036 UK employers and 2,020 employees found 46 per cent were clueless about their retirement needs while 5m (37 per cent) did not know how much was already in their pension.

These people also had doubts about their state pension entitlement, with two in five (43 per cent) being unaware of how much financial support they will receive from the government.

A further 26 per cent did not know at what age they’ll be eligible for the state pension.

Currently the age at which individuals can claim their state pension is 65 and set to rise to 66 by 2020, 67 between 2026 and 2028, and 68 between 2044 and 2046.

With the full new state pension currently valued at £168.80 per week, this adds up to a retirement income of £8,777.60 per year, Aviva stated.

And the provider stressed it was never too late to save.

Based on the average UK salary of £28,000, Aviva calculated that an employee aged 45 today with no savings to date could build a pension pot of £56,100 by the time they reach 65.

This was based on the current minimum auto-enrolment contributions of 8 per cent between employer and employees.

Aviva also found most workers saw their employer as a critical source of financial help in navigating the uncertainty around their pensions, with two thirds (65 per cent) believing the company should provide support around this topic.

Lindsey Rix, managing director of savings and retirement at Aviva, said millions of mid-life employees were "flying blind, and fast towards their retirement”.

She said: “At the same time these employees are calling upon their employers for help.

“Without a clear picture of what they currently have saved or might need to save for a comfortable retirement, our findings show many UK employees are approaching retirement with their eyes closed – with no realistic idea of how near or far they are from their destination.”

Ms Rix noted that Aviva had started to roll out its mid-life MOT to its employees aged 45 and over this year, which offers staff guidance on their wealth, along with their work and wellbeing needs.

She added: “Mid-life employees are the fastest growing employee population in the UK by age, and we urge other employers up and down the country to consider introducing similar schemes to ensure they feel fully supported.”

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