With a large proportion of the country finding their budgets being squeezed, we look at the questions everyone needs to ask to ensure they retire comfortably.

The cost of living is depleting many people’s ability to save each month, and the latest stats reveals that only 39% of UK households are currently on track for a moderate retirement income, according to new research – an alarming dip from 42% just six months ago.

Figures from the latest “HL Savings and Resilience Barometer” show that:

• Less than one-third (30%) of the highest earners are on track for a comfortable retirement. This is down from 32% six months ago.
• On average only 15% of households are on track for a comfortable retirement income.
• Rapidly rising inflation means the amount you need to save for a moderate and comfortable retirement has grown quickly. Pension values have not kept up.

Definitions of “moderate” and “comfortable” retirement income are as defined by the Pension and Lifetime Savings Association’s Retirement Income Standards.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown: “The cost-of-living crisis has squeezed our budgets tight robbing us of our financial resilience today as well as for tomorrow.

“The pressures of meeting increased day to day costs mean we have less left over to put towards our pensions which makes it a struggle to maintain, never mind increase our savings.

“It means that more of us have a nasty shock in store as we approach our retirement years. Only 38% of the over 60s are in line for a moderate income and with very little time left to make up ground many face making difficult decisions around when, how and even if they retire.”

Even the better off aren’t immune to retirement woe. Only 30% of the highest earners are on track for a so-called comfortable retirement income that will afford them treats such as trips to the theatre – which suggests some major belt tightening will be in order.

The cost-of-living crisis has hollowed out many people’s finances and they have prioritised keeping themselves afloat rather than stressing about retirement.

And while many people will have time to rebuild their retirement planning when things improve, older workers have far less time – leading to more choosing to stay in work for longer to try and make up ground.

How can I plan my retirement finances?

With so much uncertainty now surrounding many people’s retirement plans, RetireEasy CEO Richard Collinson has some helpful advice to ensure people make informed decisions well in time to avert problems later on.

“Having a firm grasp on your future finances is a key part of planning your retirement, and I’d urge everyone in their 40s and 50s onwards to be asking some key questions, such as:

• How much can I spend in retirement?
• When can I afford to retire?
• Will my money run out in retirement?
• How much do I need to save for retirement?
• Can I afford to reduce my pensions savings?
• Will inflation affect my pension plans?
• Should I delay my retirement?

“We often talk about people’s spending power, but perhaps more pertinent to those heading towards retirement is getting a better understanding of their ‘saving power’.”

Find out when YOU can comfortably retire

Making informed decisions on how much you need to be saving to secure YOUR retirement couldn’t be easier using the RetireEasy LifePlan – and it costs just a few pounds a month.

You can feed in as many different scenarios as you wish – including varying the impact that different rates of inflation will have on your plans. If your subscription has lapsed, or you’re new to RetireEasy, go here to get the information you need in easy-to-read graphs and charts.