40 million UK adults rolling the dice on retirement

  • More than three quarters of UK adults (77%) have not set savings targets for their retirement
  • 18% of women have set a financial target for their retirement compared to 29% of men, equating to 22 million women being ill prepared for their financial future

  • Two fifths (39%) of UK adults don’t see setting targets as being important to their financial planning

  • Yet 35% of those under 35 rate setting financial goals as very important compared to a national average of 27%

  • People are four times as likely to know their lottery numbers off by heart than their target pension pot 

40 million UK adults1 are rolling the dice when it comes to their retirement, admitting that they either have not or did not set savings targets for their retirement. Sanlam UK’s new ‘What’s Your Number?’ report, highlights the lack of basic knowledge that is impacting the UK’s ability to reach their financial goals.
 
The report found that more than half (55%) of UK adults doubt they’ll be able to save enough money to retire when they want to, with that just 12% of under-55s revealed to have a target for pension pot. Despite high levels of awareness that their financial circumstances are problematic, too few are addressing the problem head on.  This lack of engagement is highlighted by the fact that people are four times as likely to know their lottery numbers off by heart than their target pension pot (11% vs 3%).
 
Worryingly, the data reveals that it is those aged 45-55 - the age group that should be saving at a significant rate – that are particularly at risk, with just 18% shown to have set retirement goals. This is the equivalent of 8.2 million UK adults2 sleepwalking into their retirement, missing out on their final earning years and significantly undermining their ability to achieve their retirement goals.
 
The findings also highlight a significant gender gap, with women particularly exposed. We hear a lot about the gap in pension pots between women and men, but this report exposes an underlying flaw in closing that gap. Faced with the additional challenge of the gender pay gap, just one in five (18%) women have set a financial target for their retirement compared to 29% of men. This means that 22 million women3 are without a financial target for their retirement. With the deck already stacked against them, having clear financial goals are even more important and will help them avoid falling into the retirement trap.
 
It’s a dream for many to finally stop working, and most of us have an idea of what we’d like our retirement years to look like. The top aims were not to have to worry about money (38%), maintaining their current standard of living (34%), and being free from debt (30%). The irony is that only a small percentage are putting plans in place to make these aspirations a reality. 
 

Primary retirement goals

Not to have to worry about money

38%

To maintain my standard of living

34%

To be debt free

30%

To have a regular income

29%

To be mortgage free

17%


 When looking for an explanation for this failure to plan, the findings reveal that around two fifths (39%) of UK adults simply don’t see setting targets as being important to their financial planning. There is, however, a reason for future optimism. Those under 35 are more aware of the importance of financial planning than older generations. Around two fifths (39%) rate it as very important compared to the national average of 26%, while 86% have already set financial targets. With this approach, time on their side and the benefits that come from workplace pensions, under 35s are significantly more confident in their ability to achieve the amount they need in their savings pot (55% vs a national average of 45%).
 
Jonathan Polin, Sanlam UK CEO said: “’What’s your number?’ is a simple question, but the answer is often less straight forward. The gap between what people think they need and what they actually require in later life is huge, and sometimes life-changing. Despite years of industry effort to turn the tide, engagement with longer term savings, as highlighted in our report, is shockingly low. This suggests that we are about to see a tidal wave of people coming into retirement who will be ill-prepared and severely disappointed when faced with their retirement reality. By taking some very simple steps, setting clear financial goals, and identifying a clear path to get there, this nightmare can be avoided.
 
“While we should certainly be encouraged that younger people are increasingly aware of the importance of knowing their savings targets, the stark figures around those in the ‘squeezed middle’ should set alarm bells ringing. It is at this time of life that people should be clear about their retirement number and have a clear and achievable plan to get there.”

1 UK population 18+ - 52,383,965 see ONS Estimates of the population for the UK, England and Wales, Scotland and Northern Ireland
2 10,093,953 UK adults aged 45-55see ONS Estimates of the population for the UK, England and Wales, Scotland and Northern Ireland
3 26,794,751 adult females in the UK - see ONS Estimates of the population for the UK, England and Wales, Scotland and Northern Ireland
 

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