40 million UK adults are rolling the dice when it comes to their retirement, admitting that they either have not or did not set savings targets for their retirement. Sanlam UK’s new ‘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%) of UK adults doubt they’ll be able to save enough money to retire when they want to, with that just 12% of under-55s revealed to have a target for pension pot. Despite high levels of awareness that their financial circumstances are problematic, too few 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% vs 3%).
Worryingly, the data reveals that it is those aged 45-55 – the age group that should be saving at a significant rate – that are particularly at risk, with just 18% shown to have set retirement goals. 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.
The findings also highlight a significant gender gap, with women particularly exposed. We hear a lot about the gap in pension pots between women and men, but this report exposes an underlying flaw in closing that gap. Faced with the additional challenge of the gender pay gap, just one in five (18%) women have set a financial target for their retirement compared to 29% of men. This means that 22 million women are without a financial target for their retirement. With the deck already stacked against them, having clear financial goals are even more important and will help them avoid falling into the retirement trap.
It’s a dream for many to finally stop working, and most of us have an idea of what we’d like our retirement years to look like. The top aims were not to have to worry about money (38%), maintaining their current standard of living (34%), and being free from debt (30%). The irony is that only a small percentage are putting plans in place to make these aspirations a reality.