Only a quarter of Britons believe they will be better off than their parents when they retire

Research [1] from Schroders reveals that just 26 per cent (10.3 million) of Britons believe they will be better off than their parents’ generation when they retire. The findings reveal that 44 per cent (17.2 million) of people believe they will be worse off in retirement than their parents, fostering feelings of jealousy of a perceived ‘golden generation’ of pensioners who have benefited from significant gains in the value of their property and generous final salary pensions.

Desperately trying to boost retirement income 
The biggest fear that Britons (79 per cent) have about retirement is having too low an income to fund their desired standard of living or inflation eroding the value of their savings, while 1 in 20 (5 per cent) cite their biggest fear as being forced to sell their home. In response to these fears, Britons with pensions are desperately trying to boost their retirement income by increasing their monthly contributions.

Over one quarter (27 per cent) of private pension holders have increased their contributions in the last 12 months. Of those willing to disclose the additional amount they were investing, the average monthly increase in contributions was £84.

Sufficient reserves of income to stop working
Less than a quarter (22 per cent) of Britons are confident they will have sufficient reserves of income to stop working, particularly given the current level of economic uncertainly. As a consequence, one in five (21 per cent) people are planning to extend their anticipated retirement date. Of those planning to extend their retirement, they anticipate working on average another six and a half years, which would see millions of Britons working well into their seventies.

Invest more to have a sufficient income to fund retirement
There is a fear among many in employment that their standard of living and income will drop dramatically in retirement. With the closure of final salary schemes, reduced annuity rates and continued inflationary pressures, many Britons feel they will be worse off in retirement than their parents. While the ‘golden age’ of pensioners who benefited from rapid house price inflation and generous pension schemes is well behind us, millions of people recognise that they will need to work longer and invest more if they are to have sufficient incomes to fund their retirement. ν

[1] On 16-17 December 2011, Vision Critical conducted an online survey among 2,003 randomly selected British adults who are Springboard UK panellists. The margin of error, which measures sampling variability, is +/- 2.2 per cent. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of the United Kingdom. Discrepancies in or between totals are due to rounding.