More than 34 million UK adults, or 62% of the population, could face a major life event or financial challenge that seriously affects their retirement savings, Scottish Widows has warned.

The insurer’s latest Retirement Report found that ill health, divorce, bereavement, reduced financial resilience and low confidence managing money can all disrupt retirement planning. More than half (54%) of vulnerable people said saving for retirement increased their financial stress, compared with 29% of other adults, while 61% said thinking about retirement savings left them feeling overwhelmed, almost twice the proportion of non-vulnerable adults.

This uncertainty is translating into lower levels of planning, with 63% of vulnerable adults having done little or no research into retirement and 28% making no retirement arrangements. A further 28% had yet to start saving into a pension, while 13% had reduced or stopped their retirement savings over the past year.

Overall, 60% of adults said they lacked confidence managing their retirement savings and 66% were concerned about running out of money in retirement. One in three adults said they did not expect to be able to afford to stop working at retirement age, rising to 53% among those with a health concern.

Jill Henderson, retirement expert at Scottish Widows, said: "Financial vulnerability is something many people face at different points in their life for a variety of reasons. Whatever form it takes, the reality is that most of us will be affected by financial vulnerability at some point in our lives, even for a short period.

“This can have a permanent impact on people’s long-term financial plans, as the demands of living today may affect saving for tomorrow. It’s true that there’s no easy fix to this – but helping people build resilience while things are going well, and supporting them properly when circumstances change – is an important place to start.”

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