Regional “retirement readiness” gap revealed: Workers in Greater London and…

• Latest research from longevity think tank Phoenix Insights shows that when it comes to the UK's pensions savings gap and "retirement readiness", some regions face bigger challenges than others.
• New findings from a poll of 2,500 workers aged 45 and over across the UK show nearly three in 10 (28%) in Wales, Scotland and the South East say they won't have enough money to live on in retirement compared to one in five in the East Midlands (21%) and the South West (22%).
• Six in 10 (60%) surveyed in North East, Greater London and Wales worry they will need to work past the current State Pension age, compared to just over half (52%) of those in the North West and Yorkshire & Humberside.
• Phoenix Insights has launched an interactive pensions heatmap to shine a light on the regional imbalances across the UK when it comes to preparations for retirement.
• As more than half report they do not feel comfortable talking about retirement, Phoenix Insights has launched an interactive pensions heatmap to shine a light on the regional imbalances across the UK when it comes to preparations for retirement.

New research from Phoenix Insights, the longevity think tank from Phoenix Group, shows workers aged over 45 in Greater London and the East of England have over 40% more in retirement savings* on average compared with those in the Midlands and the North. Total savings in these regions average less than £98,000 - far below the £248,000 the Pensions and Lifetime Savings Association (PLSA)** estimate is needed for a moderate standard of living in retirement - highlighting the urgent need to do more to help close the pension savings gap across the UK.

Phoenix Insights polled 2,500 workers aged over 45 across nations and regions in the UK***, to capture how expectations and preparations for retirement vary across the country. To illustrate the severity of the regional gaps Phoenix Insights has launched an interactive pensions heatmap that paints a full "retirement readiness" picture, enabling people to understand more and discuss some of the challenges the different regions of the UK face.

As the UK's largest long-term savings and retirement company, Phoenix Group set up Phoenix Insights to help rethink what is needed for people to be prepared for their longer lives and helping to close the pensions savings gap is a vital aspect of that. This latest research shows the urgent need for change.

Phoenix Group's Patrick Thomson, Head of Research Analysis and Policy at Phoenix Insights, said:

"People across the UK are living longer lives than their parents and grandparents and unlocking opportunities they never had. But this isn't being felt evenly around the country. Most people are not saving more to reflect the fact they may be retired for longer, and many are starting to think they might want or need to work for longer than they planned, often in order to meet their retirement income needs or help their loved ones financially too.

"To enjoy fulfilling longer lives, Phoenix Group recognises that we all need to think differently about our futures, and the futures of those we care about. The journey to retirement has already changed for many people, with some reducing their hours in the run up, others embarking on second careers later in life or actively choosing to work beyond state pension age for a variety of reasons. There are also those who have left the workforce early due to ill health or through caring responsibilities.

"Our research shows that we can't afford to take a one-size-fits-all approach to solving things. We need to look at better opportunities for employment and savings, and the government's approach must reflect the needs of all parts of the UK to make a real difference to people's longer lives."

The heatmap shines a light on the five regions and cities that have currently saved the least and the most for their retirement.

Average pension savings amongst UK workers aged over 45

As the increasing cost-of-living continues to bite across the UK, making decisions about saving for the future is becoming more challenging. Many share similar concerns as they financially prepare for retirement, and more than half (55%) of workers aged over 45 report feeling uncomfortable or unsure about talking about how they're doing it.

A quarter (25%) of workers over 45 across the UK said they definitely won't have enough money to live on when they retire. This figure rises to nearly three in 10 (28%) people living in Scotland, Wales and the South East, compared to two in 10 in the East Midlands (21%) and the South West (22%). The survey also found that over a third of workers surveyed (36%) worry they will need to dip into their savings before retirement. This was particularly concerning for those living in Greater London (45%) and the West Midlands (42%).

While some people may wish to work beyond their State Pension age of 66, six in 10 (60%) of workers in the North East, Greater London and Wales worry they will need to work past this point, compared to just over half (52%) of those in the North West and Yorkshire & Humberside.

Over one in seven (15%) do not know where their main source of income with come from when they retire, rising to one in five (19%) of those in the East Midlands, and those in the North East (48%) and Wales (43%) most likely to rely on personal or workplace pensions. Workers from Northern Ireland (38%)**** and the South East (33%) were amongst the most likely to be reliant on the State Pension as their primary source of income, while those in Greater London are the most likely to rely on income from other investments (8%).

Across the UK, Phoenix Insights found that peoples' expected main source of retirement income was a strong indicator for how much they had saved; with those expecting to draw mainly from private or workplace pensions typically having over £180k in retirement savings, compared to those relying on the State Pension (£46k), and those drawing income from investments (£219k).

To tackle the regional disparities found in retirement readiness, Phoenix Insights is urging the Government to go further to ensure that everyone has the tools and support they need to engage with their pension savings earlier. This includes considering policy at a regional and local level to target action on under-saving, adapting it to the local economy and savings challenges.

To support regional action, the Government delivering on its commitments to lower the automatic enrolment thresholds will increase pension participation across the UK, and committing to a timeline to enact changes to the advice and guidance boundary will ensure that more people can access reliable and tailored financial support.

Andrew Golder
Senior Public Relations Manager
andrew.golder@thephoenixgroup.com
07977 678 988

See the interactive heatmap on Phoenix Group's brand campaign website, here: www.thephoenixgroup.com/living-longer/pensions-heatmap [note: this link will only go live on Monday 3rd July].

*Comparing the average current savings for retirement across Greater London and the East of England, with the average savings across regions in the Midlands and North (East Midlands, West Midlands, Yorkshire and the Humber, North East and North West).

**Loughborough University and the Pensions and Lifetime Savings Association. Developing retirement living standards (2019)

***Phoenix Group (2023). Nationally representative survey of 2,500 workers over 45 conducted by Opinium 17th to 24th May 2023. Data is available upon request for the following cities and regions: Scotland; Northern Ireland; Wales; North East; North West; Yorkshire and Humberside; East Midlands; West Midlands; East of England; Greater London; South East; South West; Belfast; Birmingham; Brighton; Cardiff; Edinburgh; Glasgow; Leeds; Liverpool; London; Manchester; Newcastle; Norwich; Nottingham; Plymouth; Sheffield; Southampton.

**** The base size falls below 50 respondents, so figure should be seen as indicative only but not statistically reliable.

People are living for longer. But longer lives are not yet always better lives. We want to change this.

Phoenix Insights is a new think tank set up by Phoenix Group to transform the way society responds to the possibilities of longer lives.

We use research to lead fresh debate and inspire the action needed to make better longer lives a reality for all of us. The core of our work is focused on financial security, work, and learning and skills. Reimagining longer lives means making changes in all these areas. At the heart of all our work, we are committed to reducing inequalities and building a society that enables all of us, not just the fortunate few, to live better longer lives.

Phoenix Insights is led by Catherine Foot, a leading research and policy specialist in longevity and ageing who was appointed as the Director of Phoenix Insights in June 2021.

Catherine has over 20 years of experience in the field. From 2015 to 2021, she was Director of Evidence at the Centre for Ageing Better. She has also held senior roles with The King's Fund and Cancer Research UK. Catherine holds degrees from University of Cambridge and University College London.

The think tank is supported by an expert advisory committee including Baroness Camilla Cavendish, Rt Hon Amber Rudd, Lord Victor Adebowale, Professor Lynda Gratton, Professor Sarah Harper CBE and Baroness Ruby McGregor-Smith CBE.