For young people, the prospect of retiring seems absurdly far away and few give it a moment’s thought.
Most are too busy spending their time thinking about getting a job, moving up the career ladder, buying a home, falling in love, planning holidays and starting a family.
But reality finally strikes at the age of 48, the age at which ‘retirement reality’ tends to finally hit home, according to a report published today.
This is the age at which people finally accept they cannot work forever - or, at least, might not want to - and start to consider when they will retire and how much retirement income they would like.
The report, from the pensions provider NFU Mutual, said millions of Britons are ‘facing a stark day of ‘retirement reality’.
It adds: ‘Only [at the age of 48] do they truly appreciate what savings they need for retirement and when they will realistically be able to stop work.’
For many, they have simply left it too late.
To retire with a decent income, they have little chance of being able to retire comfortably if they only begin to save at the age of 48, unless they want to save the majority of their income.
Pension advisers urge people to start saving in their twenties, rather than their forties, to give the nest egg more time to grow into a decent pot of money.
The report also reveals how people are unrealistic about the age at which they will be able to retire.
Many are having to ‘push back’ their retirement plans, typically by four years, as they ‘re-evaluate what is realistic.’
When people between the age of 55 and 64 are asked when they plan to retire, they typically say 65.
When asked when they had thought they would retire a decade ago, they typically say 61.
The report adds: ‘For some, the realisation has more dramatic consequences.
‘One in ten of those still working past the age of 55 say they now don’t ever expect to be able to retire.’
The Government is trying to solve Britain’s pensions crisis by forcing bosses to pay into a pension for their workers for the first time.
Anybody between the age of 22 and State pension age who earns more than £9,440 a year is being signed up to a pension.
Since the rules were introduced in October, around 1.7million people have been automatically enrolled. The rules hit big employers first, but are being rolled out to employers of all sizes.
Official figures show how the lack of pension saving among women as well as the rising State pension age is forcing them to work longer than many would like to work.
In 1993, just a third - 35.1 per cent - of 60-year-old women had jobs. Twenty years later, the percentage has jumped to 51.5 per cent, according to the Office for National Statistics.
The State pension age is being increased. By 2018, it will be 65 for women as well as men, and will then keep on rising for them both to 66 in 2020, 67 by 2028 and will keep on going up.
NFU Mutual’s report is based on research among 2,001 adults.
Article from Daily Mail