The Skipton Building Society Retirement Tracker found millions are significantly underprepared for retirement as a result.
The research grouped over 6,000 UK consumers into one of five distinct categories, according to their retirement savings behaviours, how much they are allocating towards future retirement needs, and their household income.
These five categories are Wise Owls, Squirrel Savers, Money Moles, Savings Snails or the Ostrich mentality.
48% were found to fall into the ‘Ostrich mentality’ category when it comes to saving for their retirement.
Individuals in this category were either not saving for their retirement or were falling short of the amount needed to secure the incomes they needed in later life, with nothing saved in addition to their State Pension.
When asked why they weren’t saving appropriately for the future, two-thirds of the Ostrich category admitted they choose not to save because of affordability.
However, of those with savings that are currently falling short, 38% believe they’ll be nowhere near their savings target by the time they retire.
According to the research, more than half of non-retirees have failed to save anything towards funding their retirement.
Nearly half admitted they have no idea how much they need.
Only 6% of the group surveyed were found to be in the “Wise Owls” category, tending towards having a more sophisticated portfolio with a broad range of savings and investments.
Nearly half of the Wise Owls group are saving to fund their retirement through a Cash ISA, over one third through a personal pension, and nearly a third through stocks and shares investments.
This group are the most likely to use cash savings to fund their retirement.
Across the rest of the UK, Skipton’s data shows that it is a mixed picture when it comes to retirement saver types.
Only 6% of the sample are classed as Squirrel Savers, meaning that they are on track to meet or exceed their savings but have a less sophisticated portfolio in comparison to the Wise Owl group.
The majority of this group are relying more on their company pension to fund their retirement than other investment and savings options.
21% of non-retired people are classified as Money Moles, which shows that they are saving without a set target but have at least one of the following to support them – a company pension, Cash ISA or are over paying their mortgage.
Only two in five Money Moles have sought financial advice.
Just one in five were categorised as Savings Snails.
This group is the most likely to talk to their friends and family for advice (18% compared to 7% of Ostriches).
They tend to save more than those with an Ostrich mentality but 35% think they’ll be quite far off saving their target amount.
In reality, 20% of this group are not saving any part of their annual household income to fund their retirement.
Are you on track to save enough for the life you want in retirement? Do you fall into the Ostrich mentality or Wise Owl group? When was the last time you spoke to a financial adviser about your retirement plans?