A third (33 per cent) of adults with defined contribution (DC) pensions have less than £10,000 saved for retirement, while nearly a fifth (19 per cent) of non-retirees have no private pension at all, research from the Financial Conduct Authority (FCA) has revealed.

The FCA's latest Financial Lives Survey revealed that one in four people in the UK have low financial resilience, and later life financial resilience was no exception, as 3.8 million retirees said that they are worried they don’t have enough money to last their retirement.

The research showed that 21 per cent (around 8.7 million non-retirees) did not have a pension in accumulation, while 10 per cent did not know if they had a pension in accumulation.

What's more, although 69 per cent of all non‑retirees had a pension in accumulation, just 59 per cent were making contributions, or their employer was on their behalf.

The research also revealed that many savers are concerned about retirement, as 22 per cent of non-retirees said they don’t understand their options, while 31 per cent admitted they hadn’t thought about how they’d manage financially in retirement.

In addition to this, over a third (38 per cent) don’t know how much they or their employer are contributing into their pension, while 12 per cent don’t know how much they have saved into their pension.

Despite these concerns, the FCA found that less than a tenth (8.6 per cent) of savers received regulated financial advice on their investments, pension and retirement planning in the past year (up from 8.3 per cent in 2022).

Instead, more than a third (37 per cent) used information or guidance to help them with their retirement planning, including 17 per cent of adults who used government-backed guidance services like Citizens Advice, MoneyHelper or Pension Wise.

In addition to pensions, the FCA found that 35 per cent of adults had investments, down from 37 per cent in 2022, and three-fifths (61 per cent) of adults with £10,000 or more in investable assets held all or at least three-quarters in cash.

The findings have prompted concern amongst industry experts, with FCA executive director of consumers and competition, Sarah Pritchard, highlighting the figures as a demonstration that finances are stretched for many, with some unable to save for a rainy day.

"And we know that some do not have the confidence to invest," she continued. "But there are improvements – more people with current accounts and less digital exclusion. Our strategy will build on this to help people better navigate their financial lives.”

AJ Bell investment analyst, Dan Coatsworth, also warned that many individuals appear to be setting themselves up for a "nasty shock" later in life by not putting enough money away for the future, warning that a lot of people will be too reliant on the state pension to pay the bills and support their lifestyle once entering retirement.

Indeed, the FCA found that the state pension is an important underpinning for many of those in, and approaching, retirement.

According to the survey, of retired adults, three in eight (37 per cent) said the state pension was their main source of income, rising to 44 per cent amongst retired women and 46 per cent for single retirees.

"The full state pension currently adds up to £11,973 a year, and while that should help keep a roof over your head, it doesn’t leave much left over for any of life’s luxuries," Coatsworth warned

However, he suggested that reforms such as ‘targeted support’, currently being prioritised by the government and the FCA, should help with this.

"These reforms have the potential to enable people to make better-informed decisions about saving and investing, boosting financial resilience and supporting the FCA’s Consumer Duty reforms, which centre on delivering good outcomes for customers," he continued.

"The economy should also be a substantial beneficiary if these reforms help spearhead a retail investing revolution in the UK.

This was echoed by Aegon UK pensions director, Steven Cameron, who said that targeted support could play a key role in encouraging savers to hold mainstream investments rather than cash, hopefully leading to greater returns for individuals as well as a boost to economic growth.

He also pointed out that recent Aegon Second 50 research suggested there will be demand for targeted support.

"But alongside this ‘newcomer’, it’s important that the FCA continues to support a thriving advice channel," he clarified.

"Enabling wider access to advice should be part of the FCA’s agenda to support the government’s growth agenda.

“It will also be interesting to track how the introduction of targeted support impacts on the government-sponsored MoneyHelper guidance service. It can only be positive for consumers to have access to both advice and a range of guidance services.”

This was echoed by Quilter tax and financial planning expert, Rachael Griffin, who said that "reforming the advice/guidance boundary is essential if we want to reach the millions currently underserved".

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