Three-Quarters of Brits Likely to Face Retirement Fund Shortfall

Nearly Three-Quarters of Brits Are Falling Short on Retirement Savings, Says deVere Group Survey.

A new survey from deVere Group, one of the world’s largest independent financial advisory firms, reveals that 74% of Brits, both in the UK and abroad, are not on track to retire with enough savings to maintain their current lifestyle.

The survey, conducted among prospective clients, suggests that many people are underestimating how much they need to save for retirement, a mistake that could have serious long-term consequences.

Nigel Green, CEO and founder of deVere Group, warns, “A retirement crisis is looming for Britons. Too many people are not saving enough and fail to grasp how much more they’ll need to retire comfortably.”

The primary reason cited by respondents for being off-track was insufficient savings. Many Brits overlook key factors like inflation and healthcare costs, which will heavily impact their retirement funds.

When asked, “What percentage of your current income could you live on in retirement?” most respondents underestimated the amount required, with many unaware of how inflation could erode their purchasing power.

Green elaborates, “It’s not just about what you have saved now, but what that money will be worth when you retire. If you’re earning £50,000 today and think £1 million will sustain you, consider inflation. In 20 years, with inflation at 3.5%, you’ll need £2 million to match the purchasing power of £1 million today.”

Inflation is just one issue highlighted by deVere’s survey. With inflation averaging 3.5%, retirees will need double their current savings to maintain their lifestyle in the future. Longer retirement periods, compounded by rising healthcare costs, further increase the financial challenge.

“Many believe they’ll spend less in retirement,” Green notes, “but often the opposite is true. While work-related expenses may drop, healthcare costs rise, and retirees often want to travel or engage in hobbies, all of which require funds.”

The survey also underscored a lack of awareness about the importance of investing as part of retirement planning. Many focus solely on saving without realizing that investing is crucial to growing wealth over time, particularly with inflation eating into savings.

Green urges a strategic approach to financial planning, emphasizing the importance of investing: “It’s not enough to just save. Investing is key to building a retirement fund that lasts. The compound effect of investing can significantly grow your savings, providing sustainable income in retirement.”

His message is clear: the earlier people start planning for retirement, the better. “People must act now to secure their financial future. Regularly review your retirement goals, assess how much you’ll need to live comfortably, and adjust your savings and investment strategies accordingly.”

“Working with a financial advisor can help you create a comprehensive plan that factors in inflation, investment returns, and healthcare costs—ensuring you’re prepared for retirement.”