The percentage of households on track for a moderate retirement has fallen to just 36.4% according to the latest data from Hargreaves Lansdowns ’s Savings and Resilience Barometer.
The average household is £31,546 short in their savings of the amount needed to give them a moderate standard of living in retirement.
Later life financial resilience has fallen across all income groups since the pandemic.
There are large variations across the country. The most resilient local authority Wokingham has a pension gap of £265.
LEAST RESILIENT
Meanwhile households in Kingston upon Hull (the least financially resilient authority overall) on average are £54,641 short of what they need for a moderate retirement.
The pensions gap is the amount on average that cohort are behind where they need to be in £ and p.

Helen Morrissey, Head of Retirement Analysis at Hargreaves Lansdown, says: “Retirement resilience has dropped from 38% just six months ago to 36% with middle to low-income households hardest hit.
“This is due to rising inflation boosting the amount of money needed for a moderate retirement with the pension gap opening up to £31,546 – four times more than it was in 2019.
“Added to this the cost-of-living crisis has had a bruising impact on our finances which many households are still grappling with.”
REGIONAL VARIATIONS
She adds: “There are massive regional variations. Wokingham for instance is well on track – on average households have a pension gap of just £265. Compare this to Kingston on Hull where the gap to a moderate retirement income stands at a massive £54,094. This is by no means the worst – when looking at median pension gap in isolation authorities around London make up the majority of the bottom ten with pension gaps of over £70,000.
“There are several ways this gap can be closed. The government’s ongoing Pensions Review is looking at how to deliver better outcomes for members.
“Moves to reduce lost pensions and the proliferation of small pots will do much to ensure much needed pension savings do not go astray so people know how much they have. We urge the government to continue to look closely at the potential of the Lifetime Pension to boost engagement as well as competition in the industry.
PLANNING BOOST
“The ability to choose the pension provider that you want your contributions to be paid to throughout your career could really boost people’s retirement planning.
“It would be far less likely to be lost as you change jobs and gives people an overarching view of what they have which can aid better decision making. You will approach one larger pension pot in a very different way than you would several small pots which you might be tempted to simply take as cash and spend. The Lifetime Pension could do much to reduce complexity for the member while ensuring providers give better value.
“Increasing auto-enrolment minimums beyond the current 8% is also an option but should not be implemented without consideration of the impact it would have on people’s short-term financial resilience.”
“Increasing auto-enrolment minimums beyond the current 8% is also an option but should not be implemented without consideration of the impact it would have on people’s short-term financial resilience.
“At HL we have argued that there are other ways to incentivise pension saving. For instance, the potential to receive a higher employer contribution if you increase your own would provide a real incentive for those with the money to spare without forcing those who don’t have the money to boost contributions to a level they can’t afford. Employers would also find their extra pension spend directed towards those who are engaged with their pensions.
“Let’s not forget the plight of the self-employed either. This is a group that lags behind when it comes to retirement provision and we are concerned by recent reports that government is considering the future of the Lifetime ISA.
“This is a product that could play a major part in boosting the retirement resilience of this group who may need a more flexible solution than a pension. The ability to access your money in times of need -albeit subject to an exit penalty makes the LISA a compelling prospect for this group.
“Moves to reduce the exit penalty from 25 to 20% and widening the age criteria to enable a LISA to be opened by older workers could make it more useful still.”