Almost three in four people worry they will run out of money in retirement, according to our commissioned research.
Figures reveal close to three quarters (73 per cent) of British adults are concerned that they won’t have enough money for the whole of their retirement.
The online study conducted by YouGov for Zurich uncovered widespread anxiety among Britons with all generations expressing doubts over their future income.
Fear cuts across the generation gap
Worries over retirement savings appeared to weigh most heavily on younger people. Among 25 to 34-year-olds, 78 per cent said they were anxious about running out of money in old age while 64 per cent of 18 to 24-year-olds also admitted concerns.
Fears were highest among 35 to 44-year-olds, with 84 per cent expressing doubts about their retirement income.
Two-thirds of those (67 per cent) over-55 also claimed to be worried their money could run dry. Of those already retired, this amounted to three in every five (62 per cent).
Gary Shaughnessy, CEO of Zurich UK Life, said:
“With the majority of Britons worrying their savings may fall short, it suggests many need advice and support to make the right choices for old age, particularly amongst the youngest savers.
“It is vital we encourage people to engage more with their pensions so they are confident of a financially stable future. Planning for retirement is a journey and the earlier people start the more likely it is they will reach their savings goals and avoid feelings of anxiety.
"That's why we have been calling for people to receive help in the workplace. But employers are currently limited because of concerns that they could be sued, even many years after they have offered financial guidance. Introducing safeharbours on their liability would help them play their part in helping savers of all ages reach better decisions.”
Relying on the state pension
The survey also suggests that fewer younger people are planning to rely on the state pension to fund their retirement.
Two thirds of 18 to 24-year-olds (64 per cent) and 72 per cent of 25 to 34-years-olds believed the basic state pension would be important in funding their retirement. This compared to 92 per cent of people over-55 and 86 per cent of 45 to 54-year-olds.
Mr Shaughnessy added: “Many savers have realised, especially among younger generations, that they will not be able to rely on the state alone to fund their retirement. This is likely to mean workplace pensions and other investments will become increasingly important for people to achieve their retirement goals.”
How much income is enough?
Reflecting worries about retirement, the poll of more than 2,000 adults found many people do not have clarity around how much money they need.
A third (34 per cent) of those surveyed who are retired or expect to retire in the future admitted they had no idea how much they will need in total to fund their ideal retirement, when asked to consider all sources of income.
Underestimating life expectancy
The majority of people also underestimated their likely length of retirement and life expectancy.
While the average length of retirement is 25 years, over half (51 per cent) of future and current retirees believed they would be retired for 20 years or less.
Most people (68 per cent) also predicted they would live to 85-years-old or less. But figures suggest half of people retiring now could live to 90 or beyond.
“Those approaching retirement age may need to make their pension pots stretch for longer than they had planned,” Mr Shaughnessy said.
“People should carefully consider how much they withdraw under the imminent pensions reforms by getting independent guidance or advice, to ensure it’s not too much too soon, which could leave them struggling in later years.”
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