A great retirement isn’t something you want to leave up to chance.
But the data shows many people a stumbling towards retirement, without a plan.
The facts: many people aren’t ready
Recent research shows how big the problem is. The 2025 Standard Life “Retirement Voice” report found:
- 1 in 3 UK adults aged 45-60 have done no planning for retirement.
- 1 in 5 UK retirees regret not planning more for retirement
- 47% think their retirement depends mostly on things they can’t control.
- Half of UK adults don’t know how much is in their pension.
- Many people focus more on saving for holidays than for retirement 🤔.
In short, lots of people aren’t preparing, or even checking what they already have.
And the consequences, are that people have either retired without enough money, or kept working for longer than they needed to.
Neither is optimal.
We’re built to think about today, not tomorrow
For the vast majority of human history, life was about surviving the next day – we were cavemen for 97% of our existence.
Hunting, gathering, avoiding predators, finding shelter. In such an environment, focusing on very long horizons (20, 30, 40 years ahead) simply wasn’t a priority.
Retirement wasn’t even a concept until about 140 years ago. Before that you worked until you died.
Our brains have evolved to discount the future heavily. That is, a reward tomorrow or next month often feels much less real than a reward today. A phenomenon called hyperbolic discounting.
Because of this, our brains learned to focus on short-term rewards. We want things that feel good today – not in 30 years.
This made sense when life was uncertain.
But today, it hurts us. Especially when we need to plan for things like retirement.
Behavioural biases exacerbate the problem
Even when we know saving is smart, our brains play tricks on us:
- Status Quo Bias – We put things off. It’s easier to do nothing than to start saving.
- Loss Aversion – We hate losing money. Saving means less spending now, which feels like a loss.
- Regret Avoidance – We fear bad news. Looking at pensions or numbers can be stressful, so we avoid it.
- Overconfidence – We think the future will be easier. Many people believe they’ll earn more later and can “catch up”, but the longer you leave it, the harder it gets.
- Perceived Lack of Control – It feels too hard. Investments and pensions can seem confusing, so people give up.
These habits come from our natural focus on the present. Our brains like quick rewards, not long waits.
For a successful retirement, we need to build plans, and develop habits to help us overcome these.
6 Simple steps to get your retirement on track
You don’t have to fix everything at once.
Simple steps to get things moving in the right direction really add up over time. Here’s where to start:
1. Work out what you’ll need
A good starting point is the 5% rule – research shows the optimal amount you can spend from your retirement savings each year is around 5%.
If you have £800,000 today, you could live off £40,000 per year from savings in retirement.
You can increase this with inflation, with minimal chance of running out of money. Of course, this assumes your retirement savings are invested in stocks and bonds, not sat in cash.
First, take the amount of income you need in retirement, that won’t be covered by income streams like rental income, final salary pensions, or your state pension.
Then, divide this amount by 5% (or multiply it by 20) – this gives you starting number for how much wealth you need when you retire.
So if you want to live of £50,000 you need £1,000,000 in investments when you retire.
2. Remember to account for rising living costs
If you need £1,000,000 to retire today, inflation will make that amount higher in the future.
A reasonable long-term inflation assumption is 2-3% per year. So if you know you need £1,000,000 but are 15 years away from retirement, multiply this number by 1.02515 (2.5% inflation for 15 years).
That’s the number you need to work towards.
In our example, retiring 15 years in the future, means you might need £1,448,298 to have the same purchasing power that £1,000,000 has today.
3. Check what you already have, and if it’s growing.
Most people underestimate the real impact of inflation, leaving their savings sat in cash. But that only means your purchasing power will be eroded over time.
Since 1900, £1 saved in cash doubled in value after accounting for rising living costs. But for long periods, it underperformed inflation, losing real value.
But the same £1 invested in companies, grew to £419.
It’s clear which asset class is most likely to power your future retirement – the one that really grows.
Beyond simply counting how much wealth you have today, look at how much of it is invested for growth, and you have too much in low-growth assets like cash and savings accounts.
4. Automate your savings
Set up an automatic transfer from your paycheck or bank account into a retirement fund.
When it happens automatically, you don’t have to decide every month. It removes the hardest step – getting started.
It also means you’re buying investments over time, you get the average of market prices, instead of trying to guess market cycles.
5. Increase it little by little
Every time you get a pay rise, be deliberate about how you use this money.
If you can survive on £50,000 dollars today, and your salary increases by an extra £10,000 tomorrow, there’s a huge opportunity to boost your retirement savings (instead of just spending more).
A good rule of thumb – every time you get a pay rise, you add half of that money to retirement savings for the future. The other half you get to enjoy today.
If you keep doing this every time your salary increases, you’ll be well on your way to a successful retirement pot.
6. Check once a year
Looking at the value of your retirement savings too often, usually just causes anxiety.
Checking once a year, gives you the right balance between knowing where you stand, and overthinking.
Once a year, look at your investments and adjust if needed. Ask for advice if you’re unsure. This keeps you on track and helps you fix small problems early.
Extra tip: Think of saving as paying your future self, not losing money today. The more real your “future you” feels, the easier it is to save.
Final Thoughts
It’s not your fault that saving for retirement feels hard – your brain wasn’t built for it. Humans are wired to think about the short term, not decades ahead.
But we can outsmart that wiring. Start small, make it automatic, and keep checking in. Over time, those small actions will grow into real security for your future self.
Your future you will thank you for starting today.
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