One in four people face short-term barriers to retirement savings

For people who are on track with their retirement savings, about one in four people have no surplus income. Similarly, about 14% did not have sufficient savings.

The company calculated this using its Savings and Resilience Barometer, which tracks the Pensions and Lifetime Savings Association’s retirement living standards as a model for a “moderate” retirement income – £20,800 for a person and £30,600 for a couple.

HL senior pensions and retirement analyst Helen Morrissey hailed auto-enrollment for getting more people to contribute to a pension, but said risks to short-term finances could end by being ignored.

“One in four people on track for a moderate retirement do not have adequate surplus income today,” she said. “It means their day-to-day finances could be strained by an unexpectedly large bill. They could also struggle to cope with the rising cost of bills and food that we see as inflation rises.”

The results also revealed that half of people who are on track with their retirement did not have adequate life insurance coverage. There was a distinction in the adequacy of landlords’ pensions, compared to those living in rented accommodation, with landlords much more likely to be on track for a modest retirement.

Results from the Savings and Resilience Barometer earlier this year found that only 39.7% of savers were on track to reach a moderate level of retirement.