Report Estimates 12.2 Million UK Adults Face Pension Poverty Risk

A new report estimates that around 12.2 million adults across the UK are at risk of being unable to cover their fundamental financial needs during retirement. The analysis published by the company indicates a notable improvement compared to the previous year, when an estimated 15.3 million individuals were not on track to meet even the minimum required for their later years.

This positive shift has been partly attributed to individuals not saving into a pension experiencing gains elsewhere, such as pay rises, increased non-pension savings, or higher rates of homeownership, the report found. A reduction in energy costs has also contributed by lowering the benchmark for household living expenses.

The company cautioned that this progress could be reversed, as global events are already pushing energy prices upwards once more. The national retirement forecast incorporated retirement living standards established by Pensions UK, which are designed to help pension savers visualise their potential lifestyle in retirement.

The forecast projects retirement outcomes for people aged 22 to 65 based on their savings, behaviours and income sources. It compares expected income to potential living and housing costs in retirement and is based on a survey of around 6,000 people carried out by YouGov in February.

The report found that fewer than one in five full-time employees face pension poverty, whereas more than a third of those who are in part-time employment or are self-employed face a less than minimum retirement lifestyle. It added that focusing specifically on those with physical or mental health conditions that impact their day-to-day lives shows that fully half, or 50 percent, face pension poverty.