Three in five UK adults (60%) are not confident they will have enough money to live comfortably in retirement, new research by Nucleus Commercial Finance has indicated.

A third (34%) of respondents to the Nucleus study said they felt they would have enough money to live comfortably for the rest of their lives, while 6% admitted they are not sure what their financial future could look like at all.

Nucleus’ findings were based on a YouGov study that asked more than 4,300 people about their retirement confidence levels. It showed that 22% of adults think they will need between £20,000 and £30,000 a year for a comfortable retirement.

However, this would fall significantly short of the PLSA’s definition of “comfortable”, which estimates an individual would require an annual income of £43,100.

“People need to start planning and saving for later life much, much earlier,” technical services director at Nucleus, Andrew Tully, commented. “It’s certainly what our over-50s would tell their younger selves and hopefully what they are telling their children and grandchildren.

“But while the desire is there, many people don’t seem to know where to begin and are finding it difficult to think about the longer-term when they have other more immediate problems to contend with.

“Part of that is due to a lack of understanding, which shows a real need for better financial education to put adults on a good footing.

“Those who do feel more confident about being able to enjoy a comfortable retirement stress the importance of having a plan and seeking quality financial advice.”

The PLSA’s retirement living standards (RLS) assume people would be mortgage or rent free by retirement. Nucleus’ research, however, suggested that many do not share the same view with 28% citing rent and mortgage payments as one of the main reasons preventing them from saving more into a workplace or private pension.

High house prices, delayed ownership and other financial challenges may significantly impact the chances of future retirees owning their property outright, and Nucleus warned that its findings suggest the assumption that most retirees have no housing costs is one which may need to change.

Other factors cited for preventing people from saving more for later life included paying off debt (18%) and saving to start or support a family (10%).

Tully added: “The road to a financially secure retirement is paved by making the right choices at the right times. We need to help lay the foundations, so people are ready to take the first step.

“With people potentially underestimating how much they will need, not appreciating how long they might need it for and not saving anywhere near enough, future retirees could be facing a perfect storm.”

---