Many in for a “nasty shock” as one third of adults have less than £10,000 saved in their pension

Meanwhile, fewer than 10% received financial advice on investments, pensions or retirement planning in the past 12 months.

More people could benefit from guidance and support when it comes to saving for retirement, a recent survey conducted by the Financial Conduct Authority (FCA) revealed. The results found only 9% of UK adults received financial advice on investments, pensions or retirement planning in the past 12 months despite a third (33%) saving for a defined contribution (DC) pension having less than £10,000 in their pot.

“Many individuals appear to be setting themselves up for a nasty shock later in life by not putting enough money away for the future,” said Dan Coatsworth, Investment Analyst at the investment platform, AJ Bell.

The latest figures imply “a lot of people will be too reliant on the state pension to pay the bills and support their lifestyle once entering retirement,” Coatsworth added. He explained: “The full state pension currently adds up to £11,973 a year and while that should keep a roof over your head, it doesn’t leave much left over for any of life’s luxuries.” 

Despite many citing the increased cost of living as impacting their ability to save money, taking some simple steps now could be key to improving your financial wellbeing in the future.

Get a head start

Although leaving the workforce may still be a long way off for some, it often pays to set money aside sooner rather than later – as is the case for most savings goals.

“By starting early, it can really make a difference to build up a decent nest egg in retirement, so it’s a myth if you read that you can put off starting your retirement pot until you’re over 30,” said Rachel Springall, Finance Expert at Moneyfactscompare.co.uk.

Auto-enrolment rules mean that most employees already pay at least 5% of their salary (inclusive of tax-relief) into their workplace pension, however, you could consider contributing more if you have any expendable income. What’s more, your employer may even match or increase their own contributions in response, providing a further boost to your pension pot.

While self-employed individuals are excluded from auto-enrolment, Coatsworth offered the reminder that “they can still use a self-invested personal pension (SIPP) or a Lifetime ISA to save for retirement and enjoy top-ups from the Government in the form of tax relief and bonuses, respectively.”

“Anyone who manages their own pension and is still in employment should think about digging a little deeper into their pocket,” Coatsworth added.

“Even an extra £30 to £50 a month could put a smile on your face in retirement. You might be sacrificing a night in the pub or a meal out, yet this money could grow in value over the coming years and fund multiple nights out down the line. Sacrifice now and save later,” he concluded.

Consolidate your pots

Depending on your circumstances, combining multiple pensions you’ve amassed from various employers over the years could make it easier to manage your later life savings and focus on meeting your retirement goals.

That being said, those with DC pensions containing £10,000 or less may still want to keep some of their pots separate and take advantage of ‘small pot’ pension rules. These allow you to cash in an unlimited number of occupational pension pots (or three personal pensions) worth up to £10,000 each without affecting certain allowances, such as your Lump Sum Allowance (LSA) and Money Purchase Annual Allowance (MPAA).

For more information or help determining your best course of action, consider speaking to a financial planner.

Invest your cash

With the survey further revealing over half (61%) of people with more than £10,000 in investible assets held these in cash, there are also steps those who are more well-off could take to supplement their financial wellbeing. The FCA stated it aims to see “a higher proportion of consumers [with £10,000 in investible assets] holding mainstream investments” which it believes would help them in saving for later life.

“Having some money for emergencies is sensible financial planning, yet hoarding cash that could be generating better returns via investing isn’t a great way to put your hard-earned money to work,” said Coatsworth.

“A lot of people have time on their side to take higher risks with their money and history suggests that investing in shares can generate a higher return than cash over time,” he added. Indeed, based on average performance in the year to February 2025, stocks and shares ISAs provided a much better return than their cash ISA counterparts.

However, it’s always important to remember your capital is at risk when investing (meaning you could get less money back than you put it) and that past performance is never a guarantee of future returns.