Over two million over-50s in the UK are yet to commit to and take saving for their pension seriously, Aviva has found.

According to the second part of Aviva’s Real Retirement Report, older workers have voiced plans to rely on external factors such as downsizing (25 per cent of over-50s), an inheritance (24 per cent), or a lottery win, to be able to achieve a financially comfortable retirement. Over one in 10 over-50s,1.3 million, said they are relying on winning the lottery to secure their retirement income.

Furthermore, research found that over-50s said they expect to reach their peak earnings during their lifetime at the age of 51 on average, lasting 5 ½ years. As a result of this Aviva’s analysis has suggested that if a saver puts away an additional £100 per month into their pension for the full period of peak earnings from age 51, this could translate to a £25,000 boost to their pension pot at retirement.

While a third, 34 per cent of older workers save more during this peak period, 21 per cent said they would spend it on big one-off purchases and 20 per cent have or would spend more of their income on everyday living and enjoying themselves. Only 12 per cent said they have or would increase contributions to a workplace pension during this time, with 14 per cent expecting to retire in the next two years saying they would increase their contributions.

A further 13 per cent of over 50s said they would seek professional advice via a financial adviser during their peak earnings period and 12 per cent would start a private pension.

However, the report highlights that as short-term pressures take precedence for older workers, almost a quarter, 22 per cent or 2.2 million workers say they are yet to take pension saving seriously. Over two in five, 41 per cent, of this age group have not calculated how much they will need in retirement and 42 per cent have not considered how much should be saved to afford a comfortable retirement.

Immediate pressures distracting over-50s from long-term saving include: the cost of living as a result of higher inflation levels, 33 per cent, the need to pay off a mortgage before retirement, 39 per cent and having financially dependent children, 18 per cent.

Moreover, of those close to retirement, 58 per cent had not upped their pension savings in the run up to retirement, including 57 per cent of those aged 60 to 64. In contrast, Aviva added: “Based on the experience of older workers, those who have taken action to prepare for retirement tend to do so in their late thirties and forties, with pension saving being taken seriously from the age of 39 on average.”

Aviva managing director, savings and retirement Lindsey Rix said: “As everyday financial pressures take their toll on older workers, many are postponing retirement planning and are instead relying on factors other than savings – many of which are outside of their control – to afford a comfortable retirement. Even those options that might seem guaranteed, such as making a profit from selling a home, could pose a challenge should economic or market conditions change.

“Wherever possible, retirement saving shouldn’t be left to chance. Although older workers have multiple demands on their income, taking time to understand what needs to be saved in order to afford a good standard of living in retirement and putting more away each month – no matter how small the increase – can make a big difference.”

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