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40 million Brits rolling the dice on retirement

Emma Lunn
Written By:
Emma Lunn

More than three quarters of UK adults (77 per cent) have not set savings targets for their retirement.

About 40 million Brits are gambling with their retirement, admitting that they either have not, or did not, set savings targets for their retirement, according to Sanlam UK.

The financial services group’s What’s Your Number? report, highlights the lack of basic knowledge that is impacting the UK’s ability to reach their financial goals.

The report found that more than half (55 per cent) of UK adults doubt they’ll be able to save enough money to retire when they want to. It also found that just 12 per cent of under-55s have a target for their pension pot.

The report found that despite high levels of awareness that their financial circumstances are problematic, too few people are addressing the problem head on.

This lack of engagement is highlighted by the fact that people are four times as likely to know their lottery numbers off by heart than their target pension pot (11 per cent vs 3 per cent).

Worryingly, the study found that it is those aged 45 to 55 – the age group that should be saving at a significant rate – that are particularly at risk, with just 18 per cent having set retirement goals.

Sanlam says this is the equivalent of 8.2 million UK adults sleepwalking into their retirement, missing out on their final earning years and significantly undermining their ability to achieve their retirement goals.

Gender gap

The findings also highlight a significant gender gap, with women particularly exposed. Sanlam says its report exposes an underlying flaw in attempts to close the gender gap in pension pots.

It found just one in five (18 per cent) women have set a financial target for their retirement compared to 29 per cent of men. This means that 22 million women are without a financial target for their retirement.

When looking for an explanation for this failure to plan, the findings reveal that about two fifths (39 per cent) of UK adults simply don’t see setting targets as being important to their financial planning.

There is, however, a reason for future optimism. Those under 35 are more aware of the importance of financial planning than older generations. Around two fifths (39 per cent) rate it as very important compared to the national average of 26 per cent, while 86 per cent have already set financial targets.

With this approach, time on their side and the benefits that come from workplace pensions, under 35s are significantly more confident in their ability to achieve the amount they need in their savings pot (55 per cent vs a national average of 45 per cent).

Jonathan Polin, Sanlam UK CEO, said: “’What’s your number?’ is a simple question, but the answer is often less straight forward. The gap between what people think they need and what they actually require in later life is huge, and sometimes life-changing.

“Despite years of industry effort to turn the tide, engagement with longer term savings, as highlighted in our report, is shockingly low. This suggests that we are about to see a tidal wave of people coming into retirement who will be ill-prepared and severely disappointed when faced with their retirement reality. By taking some very simple steps, setting clear financial goals, and identifying a clear path to get there, this nightmare can be avoided.”