Are you retirement ready? Research finds variation across the UK

When it comes to pension savings and "retirement readiness", some regions of the UK face bigger challenges than others.

New research from Phoenix Insights, the longevity think tank from long-term savings and retirement specialist Phoenix Group, reveals that workers aged over 45 in Greater London and the East of England have over 40% more in retirement savings on average compared with those in the Midlands and the North.

In regions where people have saved the least for their retirement, total savings average less than £98,000 -- far below the £248,000 the Pensions and Lifetime Savings Association (PLSA) estimates is needed for a moderate standard of living in retirement.

Average savings are highest in Greater London, at £144,000.

"Most people are not saving more to reflect the fact they may be retired for longer, and many are starting to think they might want or need to work for longer than they planned, often in order to meet their retirement income needs or help their loved ones financially too," said Patrick Thomson, head of Research Analysis and Policy at Phoenix Insights.

Sources of retirement income

Across the UK, a quarter (25%) of workers aged over 45 said they definitely won't have enough money to live on when they retire, rising to nearly three in 10 (28%) people living in Scotland, Wales and the South East.

And while some people may wish to work beyond their State Pension age of 66, six in 10 (60%) workers in the North East, Greater London and Wales believe they may need to work past this point, compared to just over half (52%) of those in the North West and Yorkshire & Humberside.

Workers in the North East (48%) and Wales (43%) are most likely to rely on personal or workplace pensions as their main source of income in retirement, while those from Northern Ireland (38%) and the South East (33%) are amongst the most likely to be reliant on the State Pension. People in Greater London are the most likely to rely on income from other investments (8%).

Phoenix Insights found that people's expected main source of retirement income was a strong indicator for how much they had saved, with those expecting to draw mainly from private or workplace pensions typically having over £180,000 in retirement savings, compared to those relying on the State Pension (£46,000), and those drawing income from investments (£219,000).

Life expectancy underestimated

A separate study highlights how much many people underestimate their own life expectancy, leading to a potential shortfall in their retirement savings.

Canada Life found that people aged 50+ on average think they will live until around age 80, whether male or female. In fact, according to the ONS life expectancy calculator, a man aged 50 will live to age 84 on average, while a woman aged 50 will on average live to age 87.

This gap between expectation and reality creates additional pressures on retirement planning and a different type of retirement gap, Canada Life said.

"Talking about and thinking about your own mortality at the best of times is difficult, but not having these conversations will leave you open to falling short when it comes to your retirement income," said Nick Flynn, retirement income director at Canada Life.

Describing annuities as "the only 100% bet against outliving your pension", Flynn said that with the significant improvement in rates seen over the past 18 months this option deserves "more than a secondary glance".

He added: "A professional financial adviser is best equipped to talk you through the various options, to ensure your plans remain on track throughout the course of your retirement journey."