There’s nonetheless time to show spherical retirement for these falling behind on pension saving, says L&G boss ANTONIO SIMOES

Life can feel like a constant balancing act in your 40s or 50s.

Work is often at full tilt and for many family needs and demands can be coming from all sides.

There’s rarely much spare headspace and pension planning often ends up in the ‘too difficult’ pile. But a comfortable retirement doesn’t just happen.

Our latest research finds that 41 per cent of people in work between the ages of 25 and 55 are not on track for the retirement income they’ll need. For too many people the conditions which allow them to build savings over a lifetime are out of reach.

Those aged 40 to 54, Britain’s ‘midlifers’ face the greatest pressures. 

Caught between two pension systems: too young to benefit from widespread final salary schemes but already well into their careers when automatic enrolment began in 2012.

One in five in this group did not start saving until after 35. While the median average pot for a midlifer today is £27,0002, which will provide a basic retirement income, averages can hide as much as they reveal.

Just as savings compound over time, so too can inequalities and missed opportunities. 

While some people in midlife have bigger pension pots and mortgages that are close to being paid off, others are renting, working part-time or have taken a career break.

Those renting typically have much lower pension savings and, if they rent into retirement, housing costs could swallow much of their income. 

By the mid-2040s, around 30 per cent of people aged 65 to 69 are expected to be renting. Certain sectors are also more at risk, with hospitality workers especially undersaved.

The picture is complicated; because there is no such thing as an average saver – and therefore there is no single fix.

Financial pressure is clearly part of the story. Among midlife non-savers, around 30 per cent say they simply cannot afford to reduce their take-home pay further.

But behavioural barriers also matter. Minimum contributions can create a false sense of security. Pension decisions are easy to postpone when life is busy.

The encouraging reality is that midlife is not the end point; it’s a hinge point. The average age of an L&G workplace pension customer is 43, they are only at the midpoint of a working life. 

But, even someone who starts at zero at that age, paying into a pension for the first time with contributions of 8 per cent could build a savings pot of £151,000 by the age of 67.

Including State Pension this will result in an annual income of £21,1483. That is significant, and even smaller increases, sustained over time, can materially improve outcomes.

We’ve long believed it’s never too early to start saving. But it’s also not too late to get savings back on track. 

That’s why we are launching a multi‑year programme of research, partnership and practical interventions to help rebuild the UK’s financial wellbeing and security.

For those wondering where to start, three steps can help.

First, know your number: check what you have saved and what income it might generate in retirement.

Second, review your assumptions, from retirement age to housing costs.

Third, stress-test your contributions. Even a modest increase, or committing part of a future pay rise, can change the long-term picture.

Of course, individual action can only go so far. Structural barriers remain, particularly for lower earners and the self-employed – only one in 10 of whom currently contributes to a pension.

And savers cannot solve this alone. Policies such as lowering the starting age for auto-enrolment, removing the lower earnings threshold and gradually increasing minimum contributions would help strengthen retirement outcomes over time.

We’re committed to stepping up to this challenge, both through the support we offer customers and by helping shape a system that delivers better long-term outcomes for everyone.

That’s why I’m inviting industry, government, employers and civil society to work with us to build the interventions that will make a difference.

Midlife savers are particularly exposed to questions about pension adequacy, but they still have time on their side. This is a large, economically active group at peak earning years.

If we don’t address this issue now, we’re storing up big individual, fiscal and social problems for tomorrow. 

But by working together today, we can positively change the retirement prospects of people – and our economy – for decades ahead.