Two fifths (42%) of over-50s are facing a retirement savings shortfall of at least a decade, new research from Fidelity International has found.
The findings are part of Fidelity’s new report The Longevity Revolution: Preparing for a New Reality, which highlights the growing gap between rising life expectancy and financial preparedness.
The 10-year savings gap was revealed by comparing how long people expected their retirement savings to last against the average life expectancy in their location.
Globally, 42% were under-planning by 10 years or more while in the UK this dips slightly to one in three (35%).
Fidelity warned that with life expectancy continuing to rise, the challenge will grow. By 2050, 3.67 million people globally are expected to reach 100. When measured against a potential 100-year lifespan, the firm said 81% of people aged 50 and over are underprepared by at least a decade.
Stuart Warner, global head of platform solutions at Fidelity International, said: “People are living longer than ever, but too many are preparing for retirements experienced by their parents and grandparents. This mismatch between life expectancy and savings horizons risks leaving many underprepared.
“With the right planning, longer lives can be a positive reality, but it requires a new mindset and earlier action.”
Despite gaps in preparation, Fidelity said there was a sense of optimism about retirement, with more than two thirds (68%) of retirees describing their outlook as positive compared to just over half (56%) of those yet to retire. In the UK, 74% of retirees describe their outlook as positive, compared to 56% of pre-retirees.
The research found that those who had taken steps to plan for retirement, such as preparing a budget or identifying potential income streams, felt significantly more ready for life after work financially, physically, emotionally and socially.
Meanwhile, seven in 10 (70%) of pre-retirees surveyed also said they are likely to work in some capacity in their retirement, primarily to stay mentally and physically active (38%) rather than as a financial necessity (26%).
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