Just 7 per cent of the UK population are on track for the retirement they want, with the average retiree on course for an income of £12,000 a year according to Aegon’s UK Readiness report.
The average desired retirement income is £35,000, nearly three times the projected reality, according to the report. The research, based on a survey of 4,000 people, found engagement with retirement saving is low, with 42 per cent having never checked the performance of their retirement savings and 30 per cent never having done anything to review or affect their plans for retirement.
The publication of the report comes as Aegon launches a direct to consumer platform with a restricted fund range from BlackRock. The platform offers Sipp and Isa wrappers and is branded ‘Retiready’.
Aegon managing director David Macmillan says: “We’re currently seeing some of the biggest changes to the pensions industry in recent memory and it’s the right time for the industry itself to lead the charge and help consumers through the minefield of pensions’ planning. It’s up to us to help people form realistic expectations for their retirement, and then help them take those small steps that could make a real difference. People can now have a renewed sense of optimism about saving for retirement after the changes announced in the 2014 Budget.
Barnett Waddingham senior consultant Malcolm McLean says: “What is particularly shocking is the extent of the problem that the research would appear to point to, and the picture this paints of unfulfilled expectations and a nation woefully ill-prepared for the challenges that our ever increasing ageing population will inevitably bring.
“A simpler, more comprehensible state pension and auto-enrolling workers into high quality workplace pension schemes are good first steps in the pension reform programme that is now under way. If Aegon’s research is to be believed, however, a lot more needs to be done before we can feel in any way confident that the future prosperity and well-being for millions of the UK’s future pensioners are not seriously at risk.”