Changing Journeys: How we save, work and retire

Phoenix Insights

Research Team

20 Nov 2024

Reports

People reaching retirement today started out on their working and saving journey many decades before. But over time, the way we work, save and retire has been changing, and will continue to change in the future.

These changes are complex, with some groups in society benefiting and others facing greater risks. The decline of final salary pension schemes means workplace pensions are much less generous than they used to be. The introduction of automatic enrolment has brought millions more workers into regular pension saving, but at levels unlikely to meet their aspirations for retirement. On average, people are both entering and retiring from work later than they used to, but many who find themselves out of work as they get older find it hard to get back into employment.

Our new research uses data to understand how demographic, societal, workplace and economic changes have all contributed to a markedly different landscape for people working, saving and retiring.

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The report draws on research from Phoenix Insights and our partners:

Existing data from robust national statistics and official sources, relating the labour market and social attitudes.
Pensions Policy Institute relating to saving, pensions and retirement.
Original polling on people’s experiences and attitudes with a UK representative survey of 6,000 adults from Ipsos MORI.

The UK is entering middle age

In 2001 there were six local authorities with an average age of 45 or older. But in 2021 there were 126.

A map of the UK showing the increase in the number of people aged over 45 in local authorities

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How we save

8 out of 10 employees now save into a pension compared to less than half of employees in 2012. But most people are not saving enough for the retirement they want, with contribution rates that congregate around the minimum default levels.
Two thirds (64%) of self-employed workers aged 60-65 have zero pension saving.
Seven in ten have done at least a little financial planning for retirement and those who are planning are more likely to feel confident they are saving enough for retirement. Most people who have received information or guidance in the last five years say that it helped them to make a decision, although the vast majority of people never take any form of regulated financial advice.

How we work

While pay peaks in the middle of people’s careers, these mask gender inequalities. There is no single year of age across the life course when women earn more than £20 an hour on average. In comparison, men earn above £20 an hour on average for every year between the ages of 34 and 60.
50 to 54 year olds are most likely to be working long hours with one in seven working more than 51 hours a week. This rises to one in five of higher earning 50 to 54 year-olds.
People in their early 50s are also twice as likely to say they want fewer hours (11%) compared to wanting more hours (5%).
Flexible work is the top reason for continued employment later in life.

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How we retire

Three quarters of people (78%) think they could do their job at age 60 but less than half (48%) think they could do it at age 70.
The average retirement age for women has increased by more than seven years from 56 to 64 over the last three decades (1994 - 2024). The retirement age for men has increased by three years over the same period.
45% of non-retirees expect to work beyond state pension age, and those currently out of work don’t expect to retire until they are 71.

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How we live in retirement

Pensioner incomes have increased by around two fifths over the last 20 years, even accounting for inflation, but so too has pensioner and pre-retirement poverty.
One in five pensioners received income-related benefits in the 2022/23 financial year.
83% of retirees say their standard of living in retirement is better than (33%) or the same as (50%) when they were working.

Have a clear vision of life in the future

Full-time workers are more likely to have a clear vision and feel empowered to make changes they would like to see in their lives over the next five years.
Nearly 3 in 10 expect to be a carer by the time they are 67 – most don’t know or think it is uncertain. Younger people are more likely to expect to become a carer.

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A story of complexity and change

The data tell a story of complexity and of change, of confidence for some, but precarity and uncertainty for others. For both good and ill, work, saving and retirement aren’t what they used to be, and if future generations of retirees are going to be better supported on their journeys to and through retirement, it is essential that policymakers, the financial services industry, employers and civil society organisations understand and respond to these changing dynamics.