As the working-age population faces more responsibility for securing their financial future, evidence suggests that many are not saving enough to meet their retirement needs.

We have updated modelling from our 2022 Longer Lives Index to understand when and how this under-saving problem may emerge over time. Using a survey of around 16,500 people across the UK aged 25 and over who are not yet retired, we analyse the trajectory of new retirees’ financial situations, providing  a timeline for how the problem of under-saving may crystallise for new defined contribution (DC) pensioners.

We find that over half (54%) of all DC savers retiring between 2025 and 2060 are expected to be either “undersavers” or “financially struggling”. These groups are either not saving enough for the retirement they expect, or are on track for an inadequate retirement. These newly retired groups are expected to peak between 2040 and 2044, meaning that millions of people will be on track for disappointment in retirement unless we can take action today.