Six in ten (59%) people aged 45 to 54 are taking action to save more for their retirement, new research from Phoenix Insights has revealed.
According to the findings, nearly a fifth (18%) of 45-54 years old workers are spending less money on holidays and luxury items, while 14% are increasing contributions to a workplace pension and 14% are putting more money into a personal pension. The same proportion (14%) of respondents said they are selling belongings they no longer need and 13% have set up automatic transfers into savings accounts.
In addition, many said they would be willing to take smaller steps to help boost their savings over the next decade, including reducing eating out and takeaways (44%), sacrificing buying a new car (35%) and cutting back on holidays (33%). Just under one in three (29%) said they would cut down Christmas spending, while 18% would sacrifice home maintenance or improvement.
Phoenix Insights estimates that 45 to 54 year olds currently have £88,000 on average in retirement savings, meaning they will need to save a further £160,000 to achieve a ‘moderate’ standard of living based on thresholds set by the Pensions and Lifetime Savings Association.
The think tank, part of the Phoenix Group, said that 10% of midlifers are also considering downsizing their home to help them save more for retirement and 8% are considering applying for a higher paid job or second job (8%).
Patrick Thomson, head of research analysis and policy at Phoenix Insights, said: “Across the UK, we are grappling with how to make the most of our longer lives, including how we prepare and save for the years ahead. For those currently in midlife, often facing substantial financial and time pressures, it can be a critical time to take stock. Phoenix Insights’ research shows it’s also a time when many people are starting to take action, with 45- to 54 year olds reprioritising their spending in order to save more and some considering significant changes to their work and where they live.
“Everyone’s journey to and through retirement will be different and it’s clear there is no one-size-fits-all for how those in midlife are saving and planning for this time in their life. For many, this can be a challenging topic to engage with. Our research shows that 49% of people aged 45-54 find thinking about their finances is the hardest part of retirement planning. But with the support of those around you, we can all take steps to build a better retirement.”