40% of savers unsure how much to save for retirement

Only a minority (16%) of UK employees are confident that the amount they are currently saving is sufficient for retirement, while 40% of workers have little or no idea how much they need to save for retirement, according to research from Royal London.

The survey found that a further 46% of savers are “fairly confident”, while a "significant proportion" (37%) are not confident.

However, the research found that two fifths (43%) of those who were confident they will have a secure income for the duration of their retirement are currently saving 5% or less of their annual gross income.

In addition to this, Royal London warned that the 'set and forget' approach utilised by auto enrolment can leave many unsure of how much they’re currently saving, with 15% unsure how much they and their employer are collectively contributing to their pension.

One in five (20%) workers also admitted to having never checked their pension savings.

Royal London warned that while now might not be the right time, without a plan to increase pension savings levels in the future, today’s cost-of-living crisis could be repeated in retirement.

Royal London director of policy & external affairs Jamie Jenkins argued that it is "therefore crucial that we set out a clear plan to raise retirement saving to more adequate levels in future".

“Saving for later life through your employer may be embedded into the DNA of the UK pensions system, thanks to automatic enrolment, but we need to be realistic about setting the right level of saving to achieve the retirement people aspire to," she continued.

“For most people, saving at the minimum of around 8% of their salary won’t be enough to give them the kind of retirement that they want.

"Older workers often look back on their working life with regret that they didn’t take more responsibility for their financial future sooner – either starting saving earlier or putting a bit more away than they did.”

“Starting to save for retirement as early as possible gives you the best chance of building up a bigger pot over as long a period as possible.”

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