State pensioners have been warned they face having to stay in work until the age of 83, as payments fall short of what they need. On average, people would like to retire at 61 – five years before the current state pension age of 66, which is set to rise to 67 in April.
Retirement Expectations vs Reality
According to a study by savings platform Flagstone on Britain's retirement expectations and financial preparedness, only 14% of people are on track to meet their desired retirement age with sufficient savings. The Department for Work and Pensions (DWP) state pension age is currently 66 for those born before 1960, but there is concern that the state pension of £12,000 a year is not enough to live on.
Survey respondents said they would need around £56,822 a year in pre-tax income for retirement. The pensions association Pensions UK estimates a comfortable retirement for a single person requires about £43,900 after tax, a similar amount.
Expert Warning
Katie Horne, savings expert at Flagstone, said: “The fact only 14% of Britons are on track to retire when they want to is a wake-up call – but it's not insurmountable. Even those on six-figure salaries face a gap of over a decade between their desired and realistic retirement age. This shows it's as much about strategy as it is about income.”
People aged 55 and above, the demographic closest to retiring, currently have an average total of £146,668 saved for retirement. The average contribution across all demographics is around £6,963 a year.
The 83-Year-Old Reality
At this rate, most people won't be able to retire until 83 – a 22-year gap between aspiration and financial reality, according to Flagstone's calculations.
Horne added: “For many, saving more is only part of the answer. Making sure existing savings are thoughtfully placed can be equally important. That might mean consolidating old pension pots, moving cash into accounts paying higher interest rates, or switching to an investment fund with stronger long-term performance. Even among experienced savers, time is often an overlooked factor in retirement planning. The sooner you act, the more interest you earn – and the longer that interest has to grow.”
