One in three Brits, or 35 per cent of the population, may experience financial difficulty in retirement due to the current economic climate, according to Scottish Widows.
Scottish Widows’ 19th annual retirement report unveils disparities in retirement preparedness among demographic groups in the UK. The newly launched National Retirement Forecast (NRF) highlights that certain segments face financial challenges, with 43 per cent of those expecting retirement struggles foreseeing ongoing rental payments.
Furthermore, because of their strong saving habits and the advantages of automatic enrolment, 43 per cent of Millennials are expected to have a decent retirement.
Living expenses are still a key concern for the majority, 75 per cent, of Brits, according to the report, which may affect how they plan to fund their retirement. A concerning minority, 21 per cent, has resorted to reducing critical expenses due to persistent economic uncertainty.
The report also highlights the poor retirement prospects for people with disabilities, with 51 per cent living in poverty and an average income of £11,000. The disability equality organisation Scope underlines the need for £975 extra per month to attain parity with households that do not have disabilities, indicating that the NRF’s estimate of the retirement income gap may be modest.
Scottish Widows head of policy Pete Glancy says: “Our new National Retirement Forecast paints a stark picture – one in three (35 per cent) 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.”
Scope head of policy and campaigns Louise Rubin says: “Life costs a lot more when you’re disabled, and planning for retirement is a luxury many cannot afford. Many disabled people are denied the opportunity to get into, stay in, and progress in work, making it much harder to build up a pension. We need to break the link between poverty and disability and make sure disabled people have an equal standard of living. Tackling the disability employment gap and driving down the extra cost of disability must be made political priorities.”
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