The retirement readiness gap: are Britons on track to retire when they want?
Most people are saving for retirement. But few are saving enough. Our research reveals why only 14% of Britons are on track to retire when – and how – they want.
This article is not advice. If you would like to receive advice on your savings and investments, consider speaking to a Financial Adviser.
Flagstone recently carried out a nationwide survey to understand how prepared Britons really are for retirement – and whether their savings match the lifestyle they hope to enjoy.
The results reveal a clear gap between expectation and reality. While most people have an idea of when they’d like to retire and the income they’ll need, far fewer are on track to achieve it.
Flagstone’s modelling* shows that only 14% of respondents are currently ‘on track’ to retire at the age and income level they want.
On average, people would like to retire at 61. But when we modelled their current pension savings and contribution levels against their income goals, the projected average retirement age rose to 83*.
That’s a 22‑year gap.
This doesn’t mean people aren’t saving. The average contribution, across all demographics, is £6,963 a year. Workplace pensions remain the most common saving method (61%), followed by savings accounts (57%), and private pensions (41%).
At first glance, the gap may seem worrying. But it also reflects a broader shift in how retirement is changing.
How big is the retirement savings shortfall?
Flagstone’s modelling found that Britons aged 55 and above – the demographic closest to retiring, currently have an average of £146,668 saved for retirement.
But based on respondents' stated income needs, the average target retirement pot is £1.42m. This figure reflects the length of time between a desired retirement age of 61 and average life expectancy (83 for women, 79 for men), combined with the income people say they’ll need and the 4% withdrawal rule – a widely-used retirement planning benchmark.
Even with long‑term investment growth, that’s a substantial shortfall for many households.
Retirement income can come from multiple sources – pensions, savings, property, investments – but the gap suggests that many people may need to rethink their timeline, their contributions, or their expectations to achieve their desired retirement.
Are higher earners any better prepared?
You might expect the retirement gap to shrink for top earners – but that isn’t the case.
Even people earning over £100,000 face an average retirement readiness gap of more than 10 years.
This highlights that the issue isn’t simply about income. Saving habits, contribution levels, and expectations around retirement lifestyle all play a role.
The average respondent contributes £6,963 to their pension each year. For those earning over £100,000, this rises to £14,167 – yet still leaves a significant gap.
Most people are actively saving. The challenge is aligning those savings with realistic long‑term outcomes.
The gender retirement divide
Our research also highlights a persistent gender gap in retirement savings.
- Average retirement savings: £141,663 for men vs. £78,171 for women
- Annual contributions: £7,435 for men vs. £6,363 for women
Engagement differs too: 24% of men have consolidated old pension pots, compared to 17% of women.
Several factors help explain this divide. Career breaks, part‑time work, and the gender pay gap all influence long‑term saving. Lower consolidation rates also make tracking progress harder, especially when savings are spread across multiple pots.
These disparities matter. Without change, many women may face reduced financial flexibility or a longer working life.
This reflects a broader structural issue: the UK was recently named the second-worst among OECD member countries for its gender pensions gap, and Age UK has identified women as a high-risk group for pension poverty.
Why retirement expectations may need to evolve
Retirement is no longer a single moment in time. According to an Aegon study, around three-quarters of people don’t expect to stop working entirely. Many anticipate a gradual shift – combining part‑time work, flexible roles, consulting, or self‑employment with pension income.
That means a fixed retirement age doesn’t always reflect modern reality. Many people foresee a phased retirement, blending continued income with reduced hours and ongoing financial planning.
This shift doesn’t close the savings gap – but it does change how people think about managing it.
Closing the retirement readiness gap
There is a clear retirement readiness gap in the UK. But it isn’t simply the result of people failing to save.
The key is understanding what you want from retirement – and making sure your saving strategy supports that ambition. Small, early decisions can help create more flexibility later in life.
Build a stronger foundation for your future with Flagstone
Understanding how expectations compare with current savings is the first step in retirement planning. The next is assessing what that might mean for your own situation.
Growing your savings efficiently today can support greater financial freedom tomorrow.
Use our pension calculator to see whether you’re currently on track for the lifestyle you want in retirement.
*Methodology
The research was conducted by Censuswide on behalf of Flagstone, surveying 2,000 UK adults. Respondents who’d already retired or answered ‘not sure’ were excluded, leaving 1,622 valid responses.
Target pension pots were calculated using the 4% withdrawal rule. Projected retirement outcomes assumed 5% annual growth with constant contribution levels. Respondents were classified as ‘On Track’ if their projected pension pot would meet their target by their desired retirement age.
Survey participants were asked:
- What age would you like to retire?
- What annual income would you like in retirement?
- How much have you saved in your pension so far?
- How much are you currently contributing to your pension each year?
Projected retirement age: 83
The projected age of 83 is calculated based on the average contribution, across all demographics being £6,963 a year. If recipients wish to retire with their desired 1.42m, this means they won’t be able to do so until they are 83.
