More savers are on track to enjoy a financially comfortable retirement, according to figures from a leading pension provider.
But the numbers are still disappointing with 88% failing to put enough cash aside for when they give up work.
Just 12% of savers are likely to hit their financial targets for retirement – but that is up from only 7% who considered they were hitting their saving objectives last year.
Pension giant Aegon reckons the roll-out of auto-enrolment pensions UK workplaces has led to more people realising that they needed to save for retirement.
Research from the firm concluded that auto-enrolment has led savers to realise just how much money they need in their retirement so they can set realistic financial goals.
Expectation gap of £14,000
In April 2015, British savers believed they would retire with pension savings of averaging £42,000.
A year later, the same group have revised their expectations down to £38,000.
Although the company still thinks this is too high, a spokesman agued savers were taking a step in the right direction.
The firm projects actual annual income in retirement based on current savings is £14,000, which means there is still an expectation gap of £24,000 between how much income is paid on retirement with how much savers want.
But there is no doubt more workers are reviewing their savings and putting more money into their pensions, says Aegon.
“Although there is improvement, the job is far from over because too many people have unrealistic retirement goals that they cannot meet because they are not saving enough,” said Aegon UK pension director Steven Cameron.
88% of people failing to save enough
“In real terms, 88% of people are failing to save enough into their pensions.
“The government and the industry need to work together to address this shortfall. We need to encourage more people to save.”
Cameron explained the key to a comfortable retirement was setting realistic savings goals and saving to hit this target from as early as possible.
“Taking this advice means fewer people will have to worry about their finances in retirement and are more likely to hit viable savings targets,” he said.
“Pensions are not the only option now. The lifetime ISA will provide another way to save for many people.”
