The majority (87 per cent) of UK workers have specific retirement goals, including travel, family time, hobbies, and spending time with partners, yet just 15 per cent have set clear financial goals and budgets, a study from Barnett Waddingham has revealed.

The firm's latest report, The At Retirement Reckoning, highlighted this as indication of a "significant gap" between aspirations and preparation, warning that Gen X savers, aged 43 to 58, were especially at risk.

Indeed, while more than half (53 per cent) of Gen X savers were confident they'd have a comfortable retirement, only 12 per cent had clear financial goals and a budget for retirement.

In addition to this, while 33 per cent had 'a rough idea', 16 per cent have no plans yet but plan to make some, and 13 per cent have no plans or intention to start planning. 

Barnett Waddingham partner, Paul Leandro, highlighted the findings as evidence of a "chasm" between expectations and reality for Brits who are thinking about retirement.

"People - especially those in their 40s and 50s - are being driven to dream of a retirement filled with travel, pursuing hobbies, and even a life overseas," he stated.

"But the life on offer may be a mirage; the aspirational lifestyle so readily on display by their parents and loved ones today is most likely funded by defined benefit (DB) pensions - a luxury which won't be there for the retirees of tomorrow. “

The research showed that over half of Gen X (51 per cent) had a defined contribution (DC) pension, while only 30 per cent had a DB one, and 49 per cent of this cohort expect the state pension to be a critical source of retirement income.

"Without a notable shift in saving patterns, many will be in for a rude awakening. Aspirations with no plans are just pipe dreams," added Leandro. 

His warning is supported by other recent studies, as recent research from Killik & Co found that adults in the UK were facing a financial planning ‘black hole’ and were “woefully unprepared” for retirement and legacy planning.

Its research found that almost half (45 per cent) had never updated their will and nearly a third (32 per cent) were not taking time to review their retirement finances.

Another survey revealed nearly three in ten (29 per cent) retirees are considering returning to work due to a lack of finances, emphasising the importance of early financial planning for retirement.

Amid these concerns, Barnett Waddingham head of DC, Mark Futcher, called for a re-evaluation of the system to avoid a "crisis".

"Sadly, there's no silver bullet to the ticking pensions timebomb. But some changes could make a real difference. Firstly, the auto-enrolment system should be improved by widening who it includes and increasing minimum contributions," he said.

“The aspiration should be to build a DC system that generates employees a comfortable retirement throughout a career, without needing further wealth to survive."

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