About 15 million people in the UK are not saving enough for their retirement, according to a report by the Pensions Commission. The independent group of experts warned the figure could rise to 19 million without urgent action. The problem is particularly acute for women, with female savers approaching retirement having private pension pots on average half the size of those held by their male counterparts. Women have a median pension wealth of £81,000, versus £156,000 for men.
Workers share their struggles
Sarah, 35, works in library services in Oxford and has saved just £5,000 into her pension. Despite working full-time and part-time, she has not opted into her workplace pension due to the cost of living. “I live alone in a small flat where my rent and essential bills come to £1,500 per month and my full-time salary is £1,880,” she says. Her part-time job brings in an extra £500 a month, but she cannot afford to save more. “I haven’t been on holiday in years. I don’t have a car. I don’t go out. So I’m not choosing lifestyle over saving.”
Danny, a 54-year-old freelance graphic designer from London, has been unable to save into a pension and still owes £30,000 from a Covid bounce-back loan. “Every time I have saved, something falls over and the savings diminish,” he says. “I don’t think I’ll ever be in a place where I can retire.” As a single father, he finds his financial future “frankly terrifying.”
Pension savings shortfall across the UK
According to the Pensions Commission, 45% of working-age adults in the UK are not saving into a pension. Only 4% of self-employed workers are saving for retirement, and about 30% of private pension pots were accessed at the earliest possible opportunity. The trade body Pensions UK has estimated that just 23% of the working population are on track to reach a “moderate” lifestyle of £32,700 a year for one person when they retire.
Kevin, 64, a digital user experience designer from Yorkshire, has saved £58,000 into his workplace pension and owns a house, but still worries. “I don’t quite know how the bills are going to stack up, without turning the heating off in winter,” he says. He had to withdraw £15,000 from his pension pot 10 years ago when he lost his job. He plans to retrain as a part-time therapist to supplement his income.
Contract workers face additional challenges
Martin, from Marlborough in Wiltshire, has saved £39,000 into his pension since 2017, working as a content editor on contracts. “As a contractor you’re not in a job long enough to be able to save for a pension,” he says. He lives with his mother and supports a child. He saves about £500 a month into a private pension but is uncertain about retirement. “The world economy is so unpredictable. You don’t know where the market is going to be.”
