UK workers are facing an escalating retirement crisis, according to a nationwide report from Smart Pension, which revealed that almost a third of savers expect to continue working once they reach retirement age.

The research surveyed over 2,500 Smart Pension members and found that those on lower incomes were most at risk.

More people earning between £10,000 and £25,000 (40 per cent) and £25,000 and £50,000 (31 per cent) believed they would need to continue working in retirement, compared to 17 per cent of those earning over £150,000.

Smart Pension said this pointed to an “increasing divide” in financial security, with middle earners also among the most uncertain about their retirement prospects.

The report highlighted the cost-of-living crisis as a key factor in making retirement more difficult, as 49 per cent of respondents believed current economic challenges would make it ‘definitely’ harder to retire comfortably compared to other generations.

Women felt this impact more acutely, with 55 per cent expressing concern about financial stability in retirement, compared to 46 per cent of men.

Consequently, many savers were struggling to balance immediate financial pressures with long-term planning, the report added.

Over a third of savers (35 per cent) have considered pausing their workplace pension contributions - a trend more pronounced among younger generations, with 38 per cent of
Gen Z and Millennials contemplating this move compared to 23 per cent of Gen X.

Meanwhile, regional disparities in retirement confidence were also evident.

Londoners were considerably more optimistic about their financial future, while savers in the North-West reported the lowest confidence levels, with only 1 in 14 expressing certainty in their ability to retire comfortably.

The report also revealed a “widespread” pensions knowledge gap.

While 80 per cent of all respondents were aware of the state pension age, this fell to only 58 per cent of Gen Z who knew when they would be eligible.

This gap narrows as workers approach retirement, but even among those aged 45-49, 15 per cent remained uncertain about when they would receive their pension entitlement.

Smart Pension chief executive, Jamie Fiveash, commented on the findings: “We are sitting on a pensions timebomb: workers are simply not saving enough to retire at all, not just comfortably.

"People across the UK are ageing during rising social and acute economic pressures. We cannot afford to kick this can down the road any longer and need to take concerted action to improve the quantity and quality of people’s savings.

“We need the government to think again about cancelling the second phase of the pension review and suggest that, within this parliament, a commitment to increasing employer contributions must be made.”

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