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Are you in one of these groups who lack the most retirement resilience?

We share which groups are lacking the most retirement resilience and what they can do about it.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

Our long-term financial resilience is showing signs of slipping. Our savings and resilience tool showed only four in ten households are currently on track to achieve what the Pensions and Lifetime Savings Association refers to as a 'moderate' retirement income. However, some groups are undoubtedly feeling the pinch more than others.

Renters, single parents and the self-employed are particularly at risk.

They were already lagging their coupled-up home owning peers when it comes to preparing for retirement. But the longer the cost-of-living crisis continues, the more exposed they're likely to be.

What retirement are you on track for?

Rough ride for renters

Soaring house prices have been stealing the headlines in recent years, but rents have also been on the rise. These rising rents are trapping people in a terrible spiral that undermines their financial resilience.

Less than one fifth of renters are on track for a 'moderate' retirement compared to just over half of homeowners.

Paying higher rent makes it harder to save a deposit, so you either don't get on the housing ladder or you get on it later. This then means more people are either paying a mortgage into retirement or paying rent for life. This is a massive ongoing cost that can have a huge impact on people's financial resilience in both the short and long term.

Compare your pension to the rest of Britain

The costs of single parenting?

Single parents are also struggling with under one fifth of households on track for a moderate retirement compared to just under half of households with two parents.

Recent research from HL puts the added costs that come with living on your own at over £800 per month – this takes account of having to pay housing costs and bills by yourself, as well as the extra costs of food. This is only going to be made worse if you're juggling children's costs with your own.

In addition to having to juggle these higher costs, single parents face the challenge of finding work that fits around child caring responsibilities and the added cost of childcare.

Having to pay housing costs and childcare as part of a couple can be onerous enough. But for a single parent, it can wipe out every spare penny and leave precious little left over to save for retirement.

How much should I pay into my pension?

What about the self-employed?

The self-employed also risk being woefully underprepared for retirement. They're not covered by auto-enrolment and are less likely to save into a pension.

Our tool shows that just over a quarter of self-employed households were on track for a 'moderate' retirement income – down from almost 28% just six months ago.

However, this does need to be caveated with the fact that self-employed people often invest in other vehicles. Government data shows one fifth of self-employed people expect income from property to be their largest source of income in retirement.

Boosting pension participation will continue to be a government focus with ongoing work on how to engage the self-employed. But also implementing changes to auto-enrolment, including allowing contributions from the first pound will help boost participation among part-time workers.

Increased awareness of products like the Lifetime ISA could also help these groups.

Lifetime ISA vs Pension – which is best if you're self-employed?

This article isn't personal advice. If you're not sure if an action is right for you, ask for financial advice. You usually need to be at least 55 before you can take money out of your pension (rising to 57 in 2028).

4 tips to boost your retirement savings in a cost-of-living crisis

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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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