Do you know how much money you will need in retirement? What about how much you already have saved? Do you know what kind of income that might provide? For a large number of people the answer is no. And the reality is stark. More than half of people agreed between 25 and 54 say they feel nervous or unsure about their retirement finances, according to a recent survey carried out by NFU Mutual. Even more concerning, fewer than one in 10 people were very confident they would be financially comfortable in retirement – dropping to just 6 per cent for women.

The country’s growing army of self-employed people could also be on track to increase pensioner poverty. Data from the Office for National Statistics shows that 15 per cent of all people in employment now work for themselves. That means they are not automatically enrolled into a pension scheme and that there’s no employer contributing to their savings. Data from HMRC reveals that the number of self-employed people putting money into pensions has fallen more than 30 per cent in just four years. There is a lot to be worried about when it comes to the nation’s pension wellbeing.

A new documentary series begins tonight on Channel 5 that lays bare just how bad the UK’s looming pensions crisis may be if more isn’t done to avert it. Britain’s Great Pension Crisis with Michael Buerk takes two families and stress-tests their pension plans. It looks at their current rate of saving and their fixed household bills, then uses the Money Advice Service pension calculator to forecast forward and see what kind of income they are on track to have at the ages they want to retire. For the couples involved, confronting the reality of the old age they are heading for is a shocking experience.

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In tonight’s episode, Rachel and Aaron are told they face an old age with just £24 a week to spend on groceries, a far cry from the £80 a week they currently have. “It is actually a real shock. A real shock,” says Rachel. “I can’t live like this when we’re old and retired.”

Yet many British people are simply sleepwalking into pension poverty, relying on the state pension to top up whatever savings they do manage. Auto-enrolment has increased the number of people saving into a pension but for many it will not be enough. And for many others, it is too late. Research carried out by Aviva earlier this year found that 9 million employees aged 45 and over do not know how much they will need to save for a comfortable retirement. And more than 5 million don’t know how much they have already saved in their pension. They are heading for retirement with no understanding of whether they will have enough money for essentials, let alone for a few luxuries like holidays and meals out.

Rising renter retirement risks

One issue set to make retirement harder for many to afford is the growth in pensioners who still have to pay for housing, whether because they bought their first homes later in life or because they never bought and must continue to rent. The number of households renting for life continues to grow. Research from Hometrack shows that between 2006 and 2016, the number of new private rented lettings increased by 24 per cent to 1.3 million. Since 2008, there have been more new private rented lettings a year than new sales.

A report from Scottish Widows carried out in 2017 suggested that over-50s renters face a £43bn shortfall in pensions savings during retirement. That analysis suggested that the average renter needs to save an extra £525 a month on top of their current pension contributions in order to cover the cost of renting throughout their retirement. For many, rising rents have not been matched by wages, making that tall order even harder to achieve.

‘Never too late’

All this makes for bleak reading for the many people like the documentary’s Aaron and Rachel who suspect they are not saving enough but who worry about affording to budget anything else for pensions. Nathan Long, senior analyst at Hargreaves Lansdown, says there is still time for late-starting savers to put their problems right. “Hitting 40 with pension savings that are undercooked can be pretty daunting, although it’s relatively common,” he says.

“This age group joined the working world when final salary pensions were already dying out but didn’t benefit at the time from automatic pension savings like we have today. It’s never too late to inject some life into your retirement plans. Boosting the amount you pay in or being a little more adventurous with where your pension gets invested can reap rewards when it comes to stopping work for good.”

But Rachel, one half of the couple featured in the first episode of the Channel 5 documentary, says most people she knows simply don’t have the information they need to do more. “No one has any idea. We had a pension company in our workplace, they gave us basic information, but to get more we had to pay them. We don’t have enough money for our pension let alone to pay for advice.

“If there is information out there then it’s not in your face and I think it needs to be in your face for people to know how important it is. “It should be taught in schools, year 11, year 12, when you leave university or college. People think retirement is far away but it’s not and it creeps up on you.”

Act now, live better

There are steps that anyone can take to improve their pension prospects, no matter what their age.

Here are a few important ways to start regaining control of your savings:

1. Find lost pensions If you’ve had a number of different employers, then you have probably had a number of different pension pots. If you think you may have lost track of your savings then there is an official website to help you find them

2. Use a pensions calculator It’s impossible to predict exactly how the markets will perform but you can get a good indicator of whether you’re saving enough via the Money Advice Service pensions calculator https://www.moneyadviceservice.org.uk/en/tools/pension-calculator

3. Work out what you need for your retirement Lots of people have different suggestions for ways to work out how much you will need as an income in old age but you know best what your costs are now and what they are likely to be then. Think about what bills you will no longer have – no commuting costs, perhaps you will own your home outright, for example. And think about the bills that won’t change and the budget you want for travel and leisure. Tally up your likely costs and you should have a good idea of what level of income to aim for.

4. Check your state pension age Don’t forget that you will be entitled to state pension as long as you have made your NI contributions. You can check how many years of contributions you have made here. Then you can find out what age you will start to receive that via the Money Advice Service calculator.

Britain’s Great Pension Crisis with Michael Buerk airs Wednesday December 4 and 5 at 9.15pm on Channel 5

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