The UK government has spent millions promoting the need for pension and retirement savings, but recent studies have shown Brits have not listened to the message.
Standard Life Aberdeen has found two-thirds of adults retiring this year in the UK are at risk of not having enough savings put aside to fund their post-work life.
The firm also discovered that the ‘class of 2021’ expects to spend an average of £21,000 ($29,050, €24,245) a year in retirement – a much lower figure than the 2020 average UK household income of £29,000, according to the Office for National Statistics (ONS).
But factoring in their pension pots as well as the money they will receive from the state pension, 66% are likely to run out of money.
According to SLA, the average pension pot for people retiring in 2021 is £366,000, but 33% revealed they have less than £100,000 in savings to fund their later life.
‘Vast numbers’
John Tait, retirement advice specialist at SLA, said: “Vast numbers of those retiring this year risk running out of money in their retirement. Retirement is a marathon, not a sprint, and many could be going into it without sufficient preparation or planning.
“Pension pots are without a doubt the most popular option for funding retirement, but it’s so important that retirees consider any other savings or assets they can use when deciding whether they can afford to retire or not.
“Understanding what money you have for your retirement and how to spend it wisely can be hard, but that’s where preparation and speaking to an expert can help.
“Circumstances or priorities may change, particularly if you’re retiring amidst a global pandemic, but it will be much easier to adapt a plan you already have, than if you were to have to start from scratch.”
Scams everywhere
But running out of money is not the only issue retirees are facing.
National fraud and cybercrime reporting centre Action Fraud revealed that as much as £1.8m has already been lost to criminals in 2021 and is urging savers to stay vigilant and protect their pots.
While overall pension scam reports have fallen by 80% from the 1,788 cases in 2014, this year has already seen an increase of 45% in incidents with 107 reports of pension fraud received by the centre.
This prompted Action Fraud to unveil a national awareness campaign called #ProtectYourPension to remind consumers that they should always do their research before making any changes to their retirement arrangements.
Pauline Smith, head of Action Fraud, said: “Criminals are malicious and unapologetic when it comes to committing pension fraud. They are motivated by their own financial gain and lack any kind of empathy for their victims, who can often lose their whole life savings to these scams.
“We know pension fraud can have a devastating impact, both financially and emotionally, but any one of us can fall victim to a fraud and it’s nothing to feel ashamed or embarrassed about. It’s incredibly important that instances of pension fraud, and attempted scams, are reported to Action Fraud.
“Every report helps police get that bit closer to the people committing these awful crimes. Reporting to Action Fraud also allows our specialist victim-support advocates to provide people with important protection advice and signpost them to local support services.”
