Marvin OnumonuScottish Widows’ Retirement Report found that around 5.7 million working age people in the UK did not think they would ever be financially independent.
Being debt-free (56%), having enough emergency savings (51%), and meeting daily expenses (43%) were the main signs of financial independence for most.
Nearly two in five (37%) did not feel confident they could cover unexpected emergencies, while a third (33%) said they had no disposable income left each month.
Around 35% said they could not save enough for retirement and 15% had not started preparing for retirement, with no plans to do so.
The research found links between affordable housing, emergency savings, being debt-free, and spare money after bills with how likely people were to take action for their future finances.
Younger adults were most affected, with 32% of people in their 20s saying they lacked financial independence, compared with 24% of those in their 50s.
People with disabilities (45%) and renters (34%) were less likely to feel financially independent.
Pete Glancy, head of pensions policy at Scottish Widows, said: “Feeling financially independent is the first step on the road to feeling financially empowered, which is essential when building your retirement income during your working life.
“Savers face a myriad of competing financial challenges – from managing their daily household budget to unplanned emergencies.
“With 15.3 million people currently at-risk of poverty in retirement, there is a clear need to help people understand how much they will need to cover their living costs in retirement, how much their projected pension is, and how to take action if needed.”
Glancy added: “But pensions should never be looked at in isolation. Accounting for goals like building emergency savings, housing security and considering other types of investments for the future is also key.
“Automatic enrolment has transformed how people save for retirement. But, as our research shows, to help more people achieve a decent standard of living later in life – especially those on low to middle incomes – targeted reforms are now needed.
“We’re calling on the Government to lower the auto-enrolment age to 18 and scrap the £10,000 earnings threshold, so more young, part-time, and self-employed workers who are currently excluded, can start saving for a better retirement.
“The results of the second phase of the Government’s pensions review could pave the way for policy change and hopefully help more people save for a better retirement.”
