There has been a major shift in the age at which people plan to leave work and start retirement
People now fear they are going to retire much later than they planned to as the gap between when people in the UK want to retire and when they think they will be able to has widened, according to new research from Standard Life.
The Standard Life Retirement Voice report shows that the average preferred retirement age for people remains 62 – unchanged on a year ago, and a year later than in 2023, when it was 61 – but the age at which people actually expect to be able to retire has increased to 67, rising from 66 in 2024 and widening the Retirement Expectation Gap.
Only 30% of UK adults say they are currently living comfortably, and despite half worrying they aren’t saving enough for retirement, only 15% have pension saving as one of their top financial priorities for the year. Almost half feel their retirement finances are outside their control.
While the scheduled rise in the state pension age from 66 to 67 between 2026 and 2028 is a possible factor in the shift in expectation, the report also shows that public awareness of the State Pension age is low – with less than one in five correctly identifying the current State Pension age of 66.
Confidence in the State Pension is also low. Less than a third think the Triple Lock will still be in place when they reach retirement, and only a little over half think that the State Pension will still be available for all by the time they retire, as it is currently.
Standard Life’s analysis shows that those who engage with retirement planning tend to have a smaller Retirement Expectation Gap. Despite being the lowest-income households, those who earn under £30,000 and say they have done ‘a great deal’ of retirement planning, have a gap of just 4.7 years compared to those who have done no planning, where it is more than eight years (8.1)
Catherine Foot, Director of the Standard Life Centre for the Future of Retirement, said: “The fact that people face a growing gap between their retirement hopes and expectations reflects the financial pressures and uncertainties many households face, and there are some clear variations depending on where you live, your level of income, the amount of pension savings you have, and whether or not you own your own home.
“Two decades ago, the independent Pensions Commission helped transform retirement saving by creating auto-enrolment. This has brought millions of people into regular workplace pension saving, but it’s clear that average rates of saving are too low to give most people a decent income in retirement. With the Commission now revived, there is an opportunity to deliver even bolder action – building on the groundwork of auto-enrolment to tackle pension adequacy, in the context of longer working lives and the ongoing State Pension age review, to help people get one step closer to achieving their retirement aspirations.”
Catherine added: “Those facing a gap between their retirement hopes and expectations can take meaningful steps to narrow it with the right support, however advice and guidance plays a crucial role here too – from encouraging people to plan earlier and save more consistently if they can, to helping people find ways to manage financially in the years before the State Pension begins.
“However it isn’t only the pensions system that needs to adapt. Many people feel unable to continue working into their late 60s and beyond, so careers and workplaces must evolve if longer working lives are to be realistic and sustainable. That means embracing flexibility, bolstering support for carers, and encouraging non-linear career paths that allow people to retrain or step back and re-enter in later life. The growing Retirement Expectation Gap highlights the need for a system that supports flexibility, resilience, and confidence in later life – underpinned by policies, employers and accessible advice that empowers people to achieve the retirement they hope for.”