Vanguard and BPM find readiness shortfalls: 51% of UK boomers and 46% of Canadians on track
Just over half (51 percent) of UK baby boomers are on track to meet their retirement goals, with the remainder likely to fall short of the income needed to maintain their current lifestyle or achieve a moderate standard of living, according to research from Vanguard.
In Canada, a similar disconnect is emerging between perceived retirement preparedness and employee experience.
The RBC Workplace Realities Poll found that while 75 percent of employers believe they are doing enough to support employees' retirement readiness, only 46 percent of employees feel supported.
Kristin Dolynski, vice president of RBC Group Advantage, said to Benefits and Pension Monitor that there is a disconnect between how employers and employees view retirement preparedness.
“Employers may assume that providing a paycheque is enough,” she said, but noted that employees are increasingly seeking more comprehensive support to secure their financial future.
The Vanguard Retirement Outlook report highlighted wide variation in retirement readiness across income groups and based on the spending benchmarks used.
When measured relative to income, a U-shaped pattern emerged—low- and high-income earners were more likely to be on track, while middle-income individuals were most at risk of falling short.
Applying an absolute spending measure altered the outlook: the proportion of low-income individuals on track dropped from 74 percent to 22 percent.
The analysis also evaluated baby boomers’ readiness using the Pensions UK Retirement Living Standards (RLS), which defines both minimum and comfortable income thresholds.
Some low-income individuals were categorised as “on track” due to reliance on the state pension, though that income still fell below the minimum RLS benchmark.
Middle-income savers showed the lowest preparedness across both measures, with only four in 10 meeting readiness thresholds.
High-income individuals remained relatively better positioned, with 75 percent on track under an absolute spending goal, compared to 62 percent using a relative goal.
The report also noted that despite the shift from defined benefit (DB) to defined contribution (DC) pensions, DB wealth remains “substantial” among baby boomers.
A majority (58 percent) of the sample held some DB savings, a factor linked to significantly better outcomes.
Those with DB pensions were more than twice as likely to meet their target replacement rate as those without.
Under the moderate RLS threshold, individuals receiving DB income were four times more likely to meet spending goals, with the strongest effect observed in lower-middle and middle-income groups.
In total, 69 percent of baby boomers with DB pensions were on track, compared to just 28 percent of those without.
Georgina Yarwood, senior investment strategy analyst at Vanguard Europe, said it’s concerning that many UK baby boomers are not on track to meet their retirement goals.
“Planning for retirement can feel complex and overwhelming,” she said, but added that steps like delaying retirement, phasing into it, using home equity, or reassessing spending can help improve their financial position.
Looking ahead, Yarwood said younger savers should start early, noting that many only begin planning three to five years before retirement.
“Time is an asset. By saving consistently and investing early, younger generations can benefit significantly from the power of compounding,” she said.
