12.2 Million UK Adults at Risk of Pension Poverty in Retirement
12.2 Million UK Adults at Risk of Pension Poverty in Retirement
Scottish Widows warns 12.2m UK adults could struggle in retirement, though gains from wages and lower energy costs offer a temporary lift amid rising prices.
Around 12.2 million adults across the UK face the prospect of being unable to cover their fundamental financial needs during retirement, a new report estimates. However, the analysis published by Scottish Widows indicates a notable improvement compared to the previous year, when an estimated 15.3 million individuals were not on track to meet even the minimum required for their later years. This positive shift has been partly attributed to individuals not saving into a pension experiencing gains elsewhere, such as pay rises, increased non-pension savings, or higher rates of homeownership, the report found. A reduction in energy costs has also contributed by lowering the benchmark for household living expenses. However, researchers cautioned that this progress could swiftly be reversed, as global events are already pushing energy prices upwards once more.
Scottish Widows’ national retirement forecast incorporated retirement living standards established by Pensions UK, which are designed to help pension savers visualise their potential lifestyle in retirement. The Scottish Widows forecast projects retirement outcomes for people aged 22 to 65 based on their savings, behaviours and income sources, comparing expected income to potential living and housing costs in retirement and is based on a survey of around 6,000 people. YouGov carried out the survey in February.
Some groups of people are particularly likely to be at risk of poverty in retirement. Researchers cautioned that recent progress could be reversed as energy prices rise again.
