Two in five people have never calculated how much they will need in retirement, and one in six says they have relied on guesswork to determine what they will need, new research suggests.

Standard Life’s Retirement Voice report found that 16% relied on gut instinct for planning their retirement money needs, and 39% have not worked out how much they will need at all. Ipsos Mori conducted the research on behalf of Standard Life among 6,000 UK adults between July and August 2024. 

The proportion that has not calculated what they will need includes 43% of Generation X and 34% of Baby Boomers, even though many Boomers are approaching or are already past state pension age. 

According to the survey, almost half of respondents (47) are worried their retirement savings will not last through retirement, including 31% of Baby Boomers.  

Planning for retirement can feel daunting, said Standard Life’s managing director for retail direct, Dean Butler.

“Part of the challenge is that calculating how much you’ll need involves a lot of moving parts – inflation and your expected retirement date are considerations, as are your lifestyle goals and any additional income sources. Without the right tools or support, it can be difficult to know where to start,” he acknowledged.

The other issue lies in our difficulty to imagine our future selves and our focus on the present, he said: “It’s tempting to put retirement planning off or assume it will all make sense in the end, but the delay can be costly. The good news is that help is available and with a few small steps, like regularly reviewing your current level of savings and using an online pension calculator, you can start to build a clearer picture of what you’ll need.”

The Financial Conduct Authority’s Financial Lives 2024, released earlier this month, echoed the finding that most people do not think about their pensioner budget; the survey found only about a third of DC members have thought “a lot” about how they will manage in retirement. In addition, 38% said they do not know how much they or their employer contribute to their pension, and 29% of those with a DC pension in accumulation did not know roughly what their combined pot was worth.

The FCA is currently preparing a consultation on rules for ‘targeted support’, a halfway house between guidance and advice. The regulator and government are also working on a new value for money framework to improve saver outcomes.