Only a quarter of UK homeowners aged over 40 say they will retire at their state pension age, according to research from Canada Life today (7 July).

The findings, based on 1,020 UK homeowners aged 40+ conducted by Opinium Research between 26-31 March 2021, showed that nearly a third (31%) of respondents said they plan to work beyond their state pension age, with this increasing to 50% of the over 60s.

Just over a third (34%) plan to finish up work early and retire before their nominated state pension age. One in ten (11%) said they had already stopped working before their state pension kicked in.

When asked what they expect their main source of income to be in retirement, just shy of a third (28%) of homeowners aged 40 and above expect the state pension will provide the bedrock of their income (22% for men vs 36% for women), despite the full basic State Pension currently standing at just £179.60 per week, or £9,350 pa. 

Almost half of the respondents polled (45%) cited their workplace pension (53% for men vs 35% for women). One in ten (11%) say it will come from their personal pension.

Canada Life also found that when looking widely at the sources of finance being incorporated into retirement planning, while men and women both expect to rely on the state pension equally, there is a clear gender gap emerging.

The biggest gaps are as follows:

  • Workplace pension - 67% (73% for men vs 61% for women)
  • Personal pension - 34% (38% for men vs 29% for women)
  • ISAs - 26% (30% for men vs 22% for women)
  • Financial investments - 15% (19% for men vs 11% for women)

Additionally, the research also highlighted the lack of uptake of financial advice among homeowners over 40, with just three in 10 (28%) plan on speaking to a financial adviser before making a decision about accessing their wealth in retirement.

Andrew Tully, technical director, Canada Life said: "Many people are looking to rely on the state pension to provide them with income in retirement. However, the amount received is not generous by any standard and as a result the onus is on individuals to take personal responsibility to save for retirement. Employees can build on the state pension and any workplace savings they have. Self-employed people face more of a challenge as they don't have an employer to help fund their retirement.

"As the goalposts for the state pension shift, its vital people check their state pension age, the amount they are due to receive and whether they are eligible for the full state pension. It's equally important that those who have spent time out of employment check their record, claim any National Insurance credits possible, and think about making any top-ups in order to be entitled to as much state pension as possible. Taking a proactive approach, seeking the help of an adviser and making good decisions now will all help to fund retirements."