More than two fifths (43 per cent) of under-45s risk not having enough money to fund their retirement, a new study has found.
This is based on the estimation that a £100,000 savings pot, which would provide an average of £5,400 per annum, would be sufficient to fund retirement.
Around a quarter (24 per cent) either do not know the value of their pension savings or do not have a pension at all, according to Sanlam UK’s study, The Generation Game.
A further 33 per cent of under-45s have less then £10,000 saved in their pension pots and around a third are relying on inheritance to boost their retirement savings.
Sanlam UK senior wealth planner, Carl Drummond said: “Our research highlights that many under-45s see inheritance as a panacea, but that’s a big gamble. Money being passed down from parents or grandparents is often split-up among other family members or, increasingly, used to pay for care costs meaning the under-45s might not inherit what they expect.”
The study also predicted that an individual would need £480,000 in their pension by retirement age to generate £26,000 per annum, the amount estimated by Which? to provide a comfortable retirement.
However, most believe they will not be able to save to the recommended level, with 57 per cent aware that they will need to save more but only 13 per cent believing it’s actually achievable.
The study also found that one fifth of over 55's don’t have any pension savings and a further 22 per cent don’t know the current value of their workplace pension scheme.
Drummond continued: “Our research confirms what we have long-feared; that people of all ages are simply not engaged enough with their pension and their financial security in retirement.
"Despite the best efforts government and many employers, the message is still not getting through that people need to think carefully about how much money they will need in retirement and start saving accordingly.”