Wage stagnation and rising living costs are set to wreak havoc on those saving for retirement, according to a new study. It means an average earner in their thirties is now on track to see their pot reduce by £15,000 by the time they retire.
Scottish Widows has shown increasing financial pressures are worrying Britons, with many hoping to cut back on spending.
However, worries are also running into retirement for Britons, according to the findings from the report.
Over the past few decades, research has shown UK pension contribution rates have significantly lagged behind European counterparts.
For the average saver, a joint employee-employer contribution rate of eight percent may not be enough for a decent living standard in retirement.
Increasing this to two years, savers could miss out on a valuable £2,100.
Pete Glancy, Head of Policy at Scottish Widows, said: “We are facing a myriad of issues and there are no easy solutions.
“It’s sadly understandable that households are being forced to make some tough choices in their budgets, but it’s important they do so whilst taking a longer-term look at their finances.
“Having a decent employer or personal pension in place is one of the best ways to plan for your future financial wellbeing.
More than 15 percent of those aged 50 to 59 said they have a desire to hold the majority of their savings in cash, rising to 29 percent for those already retired.
As the distance away from retirement shortens, many people will want to reduce their risk to avoid missing out.
However, Scottish Widows has warned that in a time of high inflation, holding larger proportions of cash can be risky and put investments in jeopardy, as it will either stay the same or decrease in value.
Before making any major decisions, Britons are typically encouraged to seek financial advice for tailored help with their retirement.
Others may opt for the free Government-backed service PensionWise, which offers options on what to do with one’s pension.