A new report has found that half of Brits plan to fund their retirement using their workplace pensions.
However, the white paper by Age Partnership has also found that many Brits are worryingly unprepared for their retirement, with one in five (who are more than ten years away from retirement) unsure how they will fund their retirement.
According to Age Partnership, one in four retirees struggle with money and 38% say they underestimated how much money is needed to live comfortably in retirement. Retiree living costs are currently £208 a week according to the white paper; however basic state pension is £122.30 per week. That leaves a deficit of £340 per month that retirees need to find from other sources.
Data from Age Partnership reveals that workplace pensions will be used by half of future retirees. Those who are contributing to a workplace pension currently put in 3.5% of their salary on average, which is matched by employers.
Property is also a popular choice for funding retirement, with one in ten planning on downsizing, and one in 20 planning to use equity release. The average Brit approaching retirement in the next ten years plans to raise £62.1k from downsizing and £61.1k from equity release.
The findings show that the further away Brits are from retirement the less likely they are to rely on state pensions; the report suggest this could be, in part, because 39% are worried about future policy changes that could affect their state pension funds.
Other key findings from the report include:
- 68% of non-retired people say they expect to live off the same income or higher when they are retired. However, many say they are struggling financially;
- 54% of Brits are worried about inflation and its effect on their pension savings;
- 85% haven't factored in the costs of elderly care to their future financial plans.
Justin Wysocki, marketing director at Age Partnership, said: "The research in this white paper clearly shows that there is unease in the UK when it comes to retirement finances. Whether you're already retired, approaching retirement or even if it feels a million years away … early preparation is key to ensure you can live comfortable after work."