The UK population’s increased longevity poses serious problems for the country’s pensions systems, Britain’s largest long-term savings business has warned.
Increasing life expectancy will require a re-evaluation of traditional notions of retirement, Phoenix Group said, in warning up to 17m British people are not saving enough to retire when they expect.
The FTSE 100 insurance group warned that “without changes to the current systems and ways of thinking, many will not be able to make the most of their longer lives.”
Research from Phoenix Group’s longevity think-tank found more than one-third (36 per cent) of Brits are likely not saving enough to retire on the incomes they expect at the age they hope to retire at.
The research showed the majority (53 per cent) of those polled expect to retire before the age of 65, as Phoenix warned this expectation is likely “unrealistic for many, particularly for younger adults”.
The research warns Covid-19 has complicated the situation, in leading to almost half a million over-50s pulling out of the UK’s workforce, therefore reversing a two-decade trend towards people working longer into their lives.
The pandemic also polarised people’s perceptions of their own savings situations, particularly among those aged 25-34, as changes in income as a result of the pandemic shifted people’s views.
This polarisation came as Phoenix’s modelling shows more than one-third of those reporting high-levels of confidence in their savings actually faced substantial savings shortfalls of more than £100,000.
Phoenix called for various reforms to tackle the looming crisis, including an expansion of auto-enrolment and efforts on the part of employers to tackle age-bias in recruiting and bring older people back into work.
It also called for a “revolution in adult education” to ensure older people are able to “retrain and reskill at different points throughout their working lives.
The insurer said efforts to improve the affordability and availability of housing will also play a “critical” part in ensuring people are able to afford a “decent standard of living in later life”.