Britons have been urged to take their retirement planning seriously this year as 13 million people are at risk of draining their pension pots.
Nearly two-in-five working-age adults in the UK are not saving enough for a comfortable retirement, new figures have shown.
Around 13 million Britons are at risk of falling short in their retirement savings, according to Pension Potential. With rising life expectancy and the ongoing cost of living crisis putting additional strains on finances, the situation has become increasingly urgent.
Steve Butler, Managing Director of Pension Potential, warns that immediate action is needed.
He said: “As we enter 2025, it’s crucial that people stop avoiding the reality of their retirement needs – planning for a secure retirement is no longer optional, it’s essential. This is the year to act, before it’s too late.”
Data from the Resolution Foundation also indicated that many individuals are failing to meet even basic targets for decent retirement income.
Annuities, which offer guaranteed income for life, are often overlooked by those not seeking proper guidance
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Research from Royal London has uncovered a concerning “ostrich syndrome” among UK pension savers, with one-in-eight people admitting they have never checked their pension savings.
This avoidance behaviour comes at a time when proper retirement planning is more critical than ever. The trend is particularly worrying as it coincides with a surge in annuity sales, which have increased by 38.7 per cent year-on-year.
Annuities, which offer guaranteed income for life, are often overlooked by those not seeking proper guidance.
However, rising interest rates and growing demand for financial stability have led to increased interest in these retirement products.
This shift suggests more people are beginning to recognise the importance of securing predictable income streams for their retirement years.
The Financial Conduct Authority (FCA) has revealed concerning statistics about pension withdrawals during 2023/24. Of the more than 885,000 pension pots accessed for the first time, 69 per cent were withdrawn without professional advice.
Many individuals made potentially unsustainable choices, selecting annual withdrawal rates of eight per cent or higher. These high withdrawal rates put retirement funds at significant risk of depleting too early.
The trend of unsupervised pension access comes despite the growing availability of retirement planning solutions. Experts warn that making pension decisions without proper guidance could lead to long-term financial consequences.
The data highlights a critical gap between pension access and professional financial advice, raising concerns about future retirement security for thousands of Britons.
Digital hybrid solutions are emerging as a potential remedy for retirement planning challenges.
Butler said: “Digital hybrid solutions are a game-changer. They’re affordable, easy to use, and they combine smart technology with expert advice to help you take control of your future.”
These solutions combine technology, digital advice and human guidance to bridge the retirement advice gap.
Pension Potential, recently recognised as a leader in hybrid retirement solutions by Defaqto, offers online retirement calculators and an all-market annuity search engine.
Users can connect with financial advisers via video call for guidance on retirement products.
The service maintains transparency with a £500 advice fee and one per cent implementation fee of the pension value.
Customers have praised the approach, with one client noting: “The advice I received was clear and professional. Pensions can be complicated, but the process was made easy with detailed explanations.”