More than half of middle-aged people are now making sacrifices to build their retirement pension pots, according to a survey from a UK long-term savings firm.
Research compiled by the Phoenix Group of 2,000 respondents showed that 59% of those aged between 45 and 54 are making more sacrifices to build their pension pots.
Just under a fifth said that they were prioritising their pensions by spending less money on holidays and luxury items.
Meanwhile, 14% revealed that they were increasing contributions to a workplace pension. The same number of respondents had decided to divert more money into a personal pension, or were even selling belongings no longer required.
A total of 13% said they had begun setting up automatic transfers into savings accounts.
Selling up to save up
One in ten are thinking of downsizing their home to boost their savings. Some are looking to change jobs or take on more work to bolster their long-term savings, and 8% said they would consider applying for a higher paid job, with the same number thinking of applying for a second job.
Many are also taking smaller steps to increase the amount on their pensions pots, recognising that saving small amounts can add up to larger savings over time.
The smaller sacrifices that savers would consider making in the next 10 years include spending less on eating out and takeaways; forgoing a new car; not going on holiday; and reducing their Christmas spending.
Midlife savers face financial challenges
Many in the survey said that they were grappling with financial headwinds in the current climate, as they attempt to save for retirement. The current high cost of living has made it harder for 63% to save, while a fifth said that higher mortgage costs were also creating a barrier to saving.
Phoenix Insights estimated that 45- to 54-year-olds in the UK currently have £88,000 on average in retirement savings. It concluded that this means that this age group will need to save £160,000 more on average for a moderate standard of living in retirement, based on Pensions and Lifetime Savings Association calculations.
Crucial time for those in midlife
Phoenix Group’s Patrick Thomson, head of research analysis and policy at Phoenix Insights, said: “Across the UK, we are grappling with how to make the most of our longer lives, including how we prepare and save for the years ahead.
“For those currently in midlife, often facing substantial financial and time pressures, it can be a critical time to take stock. Our research shows it’s also a time when many people are starting to take action, with 45- to 54-year-olds reprioritising their spending in order to save more, and some considering significant changes to their work and where they live.”
He added: “Everyone’s journey to and through retirement will be different, and it’s clear there is no one-size-fits-all for how those in midlife are saving and planning for this time in their life. As we are living longer than the generations before us, we all need to think differently about our futures, and the futures of those we care about.”