New research from Standard Life has uncovered a gap between retirement expectations and reality, with nearly a third (31%) of retirees admitting their standard of living is now worse than before they retired.
This compares with one in five (20%) who say it has improved.
As retirees contend with rising living costs, Standard Life said 17% underestimated how much money they would need in retirement and 16% said they had not expected retirement to last as long as it has.
Separate research from Standard Life found that one in three (30%) say they wish they had saved more regularly during their working life, while 29% regret not starting pension saving sooner and 16% say they wish they had planned more thoroughly for retirement.
The retirement specialist’s latest findings come amid growing concern around retirement adequacy more broadly. The Pensions Commission’s interim report recently estimated that around 15 million people are currently not saving adequately for retirement, reinforcing concerns that many future retirees could face similar financial pressures later in life.
Standard Life’s research shows that while much of the focus during working life is on building pension savings, for many retirees the biggest challenge comes after they stop working and they are faced with having to know how to make that money last through retirement.
More than one in 10 (12%) say they wish they had a better understanding of how to turn their pension savings into an income, while the same number (12%) regret spending too much too early in retirement.
According to the Pensions Commission, around 30% of private pension pots are accessed at the earliest possible opportunity, with around half withdrawn in full.
Mike Ambery, retirement savings director at Standard Life, said: “People are living longer, costs can remain high long after work finishes, and retirement itself may now last decades rather than years.
“Recent years have also shown how difficult it can be to predict some of the wider economic and global factors that shape retirement, from inflation spikes and market uncertainty to the lasting impact of the pandemic. It’s understandable that some retirees feel their finances are under greater pressure than they originally anticipated, particularly if they underestimated how much they might need or how long their savings would have to last.
“For some retirees, the gap between the retirement they hoped for and the retirement they can realistically afford becomes visible in everyday decisions. At the same time, many people are also discovering that retirement isn’t simply about building savings, but about managing how those savings are used over time.
“What’s striking is how many retirees look back wishing they had started saving earlier, contributed more consistently or planned more thoroughly.
“At the same time, there are some reasons for optimism. Greater flexibility in how people work and retire, improved access to guidance and smarter digital tools can all help people feel more in control of their long-term finances. Even relatively small contributions made regularly over time can make a meaningful difference later on, particularly when combined with tax relief, employer contributions, and the potential benefits of long-term investment growth.”
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