Researchers at Scottish Widows used the retirement living standards set out by the Pensions and Lifetime Savings Association (PLSA) and increased the thresholds in line with inflation
The number of people at risk of being unable to cover their basic needs in retirement has been revealed in a new report. The new data from Scottish Widows shows a worrying 39% of people are on track for a less than minimum lifestyle in retirement.
This outlook has worsened since 2023, when 35% of people said they would struggle to afford essential costs when they retire. Meanwhile, the new report shows 27% of people are concerned they will have to work longer than they would like, and 15% fear they’ll never be able to retire.
Researchers used the retirement living standards set out by the Pensions and Lifetime Savings Association (PLSA) and increased the thresholds in line with inflation. It means that for a minimum level of retirement standard, a single person should have £14,800 in income each year, while a couple should have £23,100.
The PLSA says this “covers all your needs, with some left over for fun and social occasions” but wouldn’t be enough to holiday abroad. If you want a comfortable retirement, you’d need to have £44,400 a year if you’re single, or £60,800 for couples.
This would allow you to “be more spontaneous with your money” and enjoy more of the things you like. Just 22% of people believe they will have a minimum lifestyle in retirement, compared to 8% who are on track for a moderate lifestyle, and 30% who believe they will have a comfortable lifestyle.
The new report from Scottish Widows also shows low to middle-income earners and people under the age of 40 could be at particular risk of falling short of achieving a basic retirement lifestyle.
A quarter of people don’t feel financially independent, with young adults, people with disabilities, renters, and low-income earners being the most affected.
The main barriers for achieving financial independence include insufficient savings for emergencies and retirement, and the inability to save more. The main priorities for people include earning a higher income, getting on the property ladder and paying off debt.
Part-time and self-employed workers are more likely to face worse retirement outcomes than full-time workers, the research indicates. Differences in retirement prospects across the UK were also found.
The proportion of people estimated to be on track to have at least a minimum lifestyle in retirement ranged from just over half (52%) in both Northern Ireland and the North East of England to more than two-thirds (68%) in the East of England.
Scottish Widows teamed up with Frontier Economics and used a YouGov survey of more than 5,100 people across the UK in January and February.
Pete Glancy, head of pensions policy at Scottish Widows , said: “Our research couldn’t be more timely, spelling out just how crucial targeted measures are in preventing millions from living in retirement poverty in the coming years.”
He added: “For now, the challenge is helping people make the most of what they have. It is essential to ensure people feel financially empowered to make informed decisions and take proactive steps for their future – with a strong sense of financial independence playing a key role.”
Number of people on track for minimum retirement
Here are the proportions of people who are estimated to be on track for at least the minimum PLSA retirement living standards in UK nations and regions.
- Northern Ireland – 52%
- North East – 52%
- South West – 54%
- Wales – 56%
- West Midlands – 58%
- London – 59%
- North West – 59%
- Scotland – 61%
- East Midlands – 64%
- Yorkshire and the Humber – 66%
- South East – 66%
- East of England – 68%
