A recent study warns that millions of people born before 1970 may face financial insecurity during retirement. With concerns over state pensions and private savings falling short, experts highlight the importance of planning and additional income sources.
An Oxford Risk study reveals that more than half of Britons aged 55 and over fear their retirement funds will not last a lifetime. The findings point to widespread confusion around savings and significant financial disparities between men and women, underlining the urgency for tailored advice and informed strategies.
State Pensions and Savings Under Scrutiny
The state pension, a cornerstone of retirement income in the UK, is increasingly viewed as insufficient to meet the needs of retirees. The Oxford Risk research shows that over 10.5 million people aged 55 and older—more than half of this age group—worry about running out of money during retirement. Additionally, 86% of respondents believe they will need supplementary income sources to sustain their desired lifestyle.
Experts emphasise that the rising cost of living, coupled with gaps in private savings, exacerbates financial pressure. Those nearing state pension age are especially vulnerable, with many lacking clarity about their savings or the full scope of their financial needs. Dr Greg B Davies, Head of Behavioural Finance at Oxford Risk, explained, “Our research highlights significant disparities between women’s and men’s financial security in retirement. Despite planning to spend less, many women face substantial financial gaps, with lower savings and less certainty about their retirement income.”
Gender Disparities in Retirement Planning
Notable distinctions between the ways that men and women approach retirement funding are also highlighted by the study. With 41% of women wanting to work part-time compared to 30% of men, women are more likely than men to consider part-time employment or property income as alternate sources of funding, with 21% of women planning to rely on property income compared to 18% of men.
On the other hand, men are more likely than women to rely on investment portfolios and self-invested personal pensions (SIPPs), with their respective percentages being 23% and 25%, compared to 10% and 16% for women. Additionally, 53% of men and 50% of women plan to use cash surpluses as a primary retirement funding source, further highlighting differing strategies between the genders.
These findings underline the need for tailored financial planning to address gender-based disparities. Financial advisers and behavioural finance tools are seen as key to empowering individuals, helping them make informed decisions that reflect their unique circumstances and goals. Dr Davies added that advisers play a vital role in bridging these gaps and providing practical solutions.
