Nine million middle-aged workers are “sleepwalking” into retirement

21 August 2019

Two in five employees over 45 are unaware of how much pension they will receive


Millions of mid-life UK employees are sleep walking into retirement because they don’t understand pensions, new research reveals.

Nearly nine million people do not know how much they will need to save to afford a comfortable retirement, while over five million do not know how much is already saved in their pension, according to Aviva.

There were also question marks about how much the state pension is worth, with two in five employees unaware of how much they will receive. A further 26% do not know at what age they’ll be eligible for the state pension.

The current state pension age is 65 and is due to increase to 67 by 2028 and to 68 by 2039.

The full new state pension is currently valued at £168.80 per week, which adds up to a retirement income of £8,777.60 per year.

Pension freedoms, which were introduced in 2015 to give people greater access to their pension pots, have only added to the confusion.

Most employees (62%) aged over 45 do not know what the pension freedoms mean for them, while 37% do not know what type of pension scheme they have.

Aviva says the analysis also highlights it is never too late to save.

Based on the average UK salary of £28,000, Aviva calculates that an employee aged 45 today with no savings could build a pension pot of £56,100 by the time they reach 65.

This is based on of annual pensionable earnings under auto-enrolment of 8% between employer and employee.

Projected value of savings for average employee by retirement age of 65

Starting age Amount saved by employee (5% contribution of annual pensionable earnings) Amount contributed by employer (3% contribution of annual pensionable earnings) Projected value of pension savings by 65 years old (projected investment growth of 2.4%)
45 £21,840 £13,200 £56,100
50 £16,380 £9,900 £39,600
55 £10,920 £6,600 £25,500
60 £5,460 £3,300 £13,600

Source: Aviva UK, 2019

Aviva also found that most employees see their employer as a critical source of financial help in when it comes to the uncertainty around their pensions, with two-thirds believing their employer should provide support around employees’ pensions.

Lindsey Rix, managing director of savings and retirement at Aviva, says millions of mid-life employees are “flying blind” towards their retirement.

She says: “At the same time these employees are calling upon their employers for help.

“Without a clear picture of what they currently have saved or might need to save for a comfortable retirement, our findings show many UK employees are approaching retirement with their eyes closed – with no realistic idea of how near or far they are from their destination.

“As a first step, mid-life employees who are mystified by their pension savings should try to get a clear picture of what they have saved so far and how much of an income this can provide them with over the course of retirement.

"For some, this may be a pleasant surprise, while for others, it could be the wake-up call that’s needed to spur them to take action. People whose pensions are in need of a boost shouldn’t be disheartened, however, as it’s never too late to save.”


Pensions Sleepwalking!

I work for a major financial institution and am in my mid 50s. I am absolutely amazed by how little many people know about Pensions.
They really aren't that complicated and there is plenty of info available on many websites.
Please take some time to find out what you currently have saved and estimate what you will need at retirement. Then work out what extra you need to add to ensure you have enough when you get to retirement.


Divorcees and middle aged people need to ensure that they have sufficient contributions to the State Pension scheme for a full pension.

Very easy to discover if you need to make additional payments.

*Remember that the State pension is index linked, so if we get roaring inflation in 15-20 years time, you are to some extent protected.

Stop Ignoring It.

The young are better off as they will also have workplace pensions which they contribute to also their employer contributes into plus tax relief, I never had any job that offered a work pension years ago but had to contribute to Graduated Pension Scheme which took my old state pension over the GPC limit saving the state money. A couple on the new state pension should find it easy enough but when living alone you still have the same bills but only half the pension, can save on food and clothing but that's about it. People need to think about retirement much earlier and things like prepaid funeral plans, it's easier now with the £1,400 option for a basic funeral so you know where you are going, many never think of it and expect others to pay for them, that's bad. There could have been a supplement of some kind for people living alone especially in their old homes who have to pay for repairs and maintenance, maybe they should be able to obtain some services at a special price through social housing organisations that they have subsidised with their taxes when working for others to benefit from.

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