Three quarters of workers not on track for 'moderate' pension income, report suggests

More than three quarters of UK workers are not saving enough to afford a moderate lifestyle in retirement, according to a new report from the pensions industry [1]. The findings warn of a 'cliff-edge drop in income' for many retirees. The report by Pensions UK defines a moderate lifestyle as costing £32,700 annually for a single person and £45,400 for a couple [1]. It estimates only 23% of the working population are on course to achieve this income level, while a mere 9% are on track for a comfortable retirement, defined as £45,400 for one person and £62,700 for two [1]. In contrast, 82% are projected to reach a minimum standard, which covers essentials like groceries, a UK holiday, and limited leisure [1]. The income targets, developed by the Centre for Research in Social Policy at Loughborough University, have risen due to increased costs for food and socialising [1]. Zoe Alexander of Pensions UK stated, "Far fewer will go beyond that. That is out of step with what people expect for their future. Without action, too many risk facing a cliff-edge drop in income when they stop work" [1]. The report calls for action from workers, employers, and the government to boost savings. This savings gap is exacerbated by structural inequalities. Tax authority figures show women have about half the pension savings of men, with investment platform AJ Bell noting the divergence begins around age 28 [1]. The gender pay gap, where women globally earn less than men for the same work, is a likely contributing factor to this pension disparity [4]. The UK government has revived the Turner Pension Commission, which previously led to automatic enrolment, to address the shortfall [1]. The interim report suggests people retiring in 25 years could be 8% worse off annually than today's retirees [1]. Specialist firms like XPS Pensions, a FTSE 250-listed consultancy, operate in this complex regulatory environment [7]. The challenge remains significant, as the report underscores the gap between retirement expectations and projected savings for the vast majority of workers [1].