Over 9 million Brits have no pension provision, but expect to retire by 62

Research from Baring Asset Management (Barings) reveals that on average, Brits expect to be retired by the time they are 62.

However, the research found that of those adults yet to retire 24% (9.03 million adults) have made no pension provision at all. The findings highlight the fact that millions of Brits are failing to seriously plan for their retirement.

People’s target age for retirement is particularly low among the younger age groups with those aged 18 – 34 expecting to be able to retire at 61. This is in spite of Government recommendations that the age of retirement for UK adults was set to increase to 66 by 2024, 67 by 2034 and 68 by 2044.

According to the research 33% (12.25 million) people expect to be able to retire between 60 and 65 years of age. Some 4.83 million people expect to be able to retire before they reach 55 and a further 7.43 million expect to retire between 55 and 60. 16% of Brits (5.94 million) expect to have to work much longer than this as they do not plan to retire until 65 or later. The number of people planning on working until they are at least 75 is just 371,385.

An incredible 46% of people planning to retire before they reach 50 years of age do not even have a pension. 21% of people expect to be able to retire before 50 with a Defined Contribution (DC) scheme, and 17% expect to be able to retire on a Defined Benefit (DB) final salary related scheme (2%). 11% of people planning to retire before their 50th birthday are relying on their property to do so.

Only 30% of people with a DC scheme expect to be able to retire before they are 60. This rises to 42% of people with a DB scheme, and 48% of people who rely on their property as a pension.

Barings’ Head of European Sales, Rob Lay, is urging people to plan more carefully for their retirement: “People have to start taking a more proactive approach to planning for their retirement. Relying on a DB scheme is no longer an option for many UK adults and relying on your property as a pension is a very risky strategy to take. These figures reveal a worrying trend of UK adults assuming that they will be in a position to retire without having made the necessary arrangements for funding that retirement.

“People are increasingly expected to live longer, which is a major issue facing our society. At the same time, the way adults plan for retirement is changing – we can’t rely on DC schemes or a state pension any longer. It is absolutely vital for people to start considering how best to build their pension fund from the day they start working. Unless they make the correct provisions now, that target age for retirement will slip further and further away.”