Renters face grim retirement according to pension sur...

One in three Britons could be facing poverty in retirement according to Scottish Widows - with renters amongst the most vulnerable.

The report’s National Retirement Forecast claims to be the clearest picture ever captured of the UK’s future retirement landscape.

The NRF compares the retirement lifestyles within reach for different ages, ethnicities, genders and employment statuses, as well as zeroing in on underrepresented groups such as disabled people and the LGBTQ+ community.

In forecasting savers’ anticipated lifestyles, the NRF recognises that factors other than pensions play a role in the income people will rely on in retirement and also accounts for housing costs.

Scottish Widows says some 43 per cent of the people predicted to struggle in retirement expect to be still paying rent.

Rental costs amount to 60 to 70 per cent of renters’ retirement income in several parts of the country, especially in London.

And 41 per cent of people currently in their 20s are heading for hardship in retirement, with an average retirement income of £10,000 among this group.

On average, women will receive a third less income in retirement than men while half of Britons have not checked whether they are entitled to the full state pension.

In addition, the NRF highlights how employment patterns can create challenges for different demographics.

Women, ethnic minorities and disabled people are disproportionately represented in lower paid and part-time jobs in which it is more difficult to accrue a sufficient pension pot.

Meanwhile, self-employed people generally lack formal incentives to save adequately compared to full-time employees.

The average full-time employee is on track to receive £27,000 a year in pension income – nearly three times what the average part-time employee and the average self-employed person are on track for.

Pete Glancy, Head of Policy at Scottish Widows, says: “Our new National Retirement Forecast paints a stark picture – one in three of us are facing the harsh reality of a retirement where we will struggle to make ends meet.

“Last year’s Retirement Report highlighted the impacts of the pandemic, cost of living and wage stagnation. This year the pressure seems to have intensified due to increasing inflation and interest rates continuing to climb.

“The solution needs to be threefold. We are calling on the Government to help end retirement poverty by implementing long-term reforms, such as ensuring that automatic enrolment can support those on lower incomes.

“Secondly, businesses need to do more to address the inequalities faced in the workplace by disadvantaged groups like women, disabled people and the LGBTQ+ community.

“Finally, the financial services industry must get better at effectively communicating with diverse groups to build trust and ensure that people of all incomes and demographics understand how to save effectively for retirement.”

Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.

Peter Why Do I Bother
28 June 2023 11:37 AM

Absolutely spot on Jo, the constant changes to pensions means I distrust them with every inch of my being.

Ripped off by large companies to the tune of nearly £50k and government recommended companies at that.

Never again will I trust a pension provider in the UK