The dream of retiring early is slipping further out of reach for millions – with the typical worker now expecting to carry on for five years longer than they would like.
A major study by Standard Life found that while the preferred retirement age remains 62, the average Brit now believes they won’t be able to give up work until 67 – up from 66 last year.
That gap between hope and expectation – dubbed the Retirement Expectation Gap – has widened for a second year running, fuelled by the cost of living crisis, pension uncertainty, and rising economic pressures.
Catherine Foot, Director of the Standard Life Centre for the Future of Retirementm said: “People face a growing gap between their retirement hopes and expectations, »
“Average rates of saving are too low to give most people a decent income in retirement. The system must evolve if longer working lives are to be realistic and sustainable.”
The report found that half of Brits are unsure whether the State Pension will even exist by the time they retire, while only 29% believe the Triple Lock will still be in place.
Just three in ten adults say they are living comfortably, while almost half (47%) feel their retirement finances are “outside their control.”
Regional divide
Workers in the North East face the bleakest outlook, with nearly six years between when they hope to retire and when they believe it will be possible – 61 versus 67.
By contrast, those in London report the smallest gap – 63 versus 66.
The report found that rising prices and uncertainty over pensions are eroding confidence. Only 15% of adults said pension saving was one of their top financial priorities this year.
Among lower earners, the picture is worse – those on under £30,000 who haven’t planned for retirement face a staggering eight-year gap between expectation and reality.
Yet Standard Life says even a small increase in pension contributions could make a major difference. Someone on a £25,000 salary who raises contributions by just 2% from age 22 could build an extra £51,000 by 67.
Ms Foot added that “careers and workplaces must evolve” to allow people to work flexibly into later life.
“Many feel unable to continue working into their late 60s,” she said.
“That means supporting carers, retraining older workers, and allowing people to step back and re-enter work as needed.”
The report warns that without urgent action, the UK faces a growing divide between those who can afford to retire on their own terms – and those who will have no choice but to keep working long after they want to stop.
