The retirement prospects of millions of over-50s rely on downsizing, an inheritance or a lottery win, according to new research.

Aviva’s ‘Real Retirement Report’ covered 3,300 adults aged over 50 and revealed the precarious nature of many over-50s retirement plans.

The report found that peak earnings are thought to kick in aged 51 and although 34% saved more during this period only 12% say they have or would pay more into a pension.
Older workers’ says their ability to save is hampered by the cost of living (33%) and the need or desire to pay off a mortgage (39% of mortgage-holders).

Almost a quarter (22%) or 2.2 million workers aged 50+ say they are yet to take pension saving seriously. More than two in five have not calculated how much money they will need in retirement (41%) and how much should be saved to afford a comfortable retirement (42%).

Aviva says its report shows that older workers are finding themselves caught in a game of “retirement roulette” as many are relying on external factors such as a downsizing (25%), an inheritance (24%) or even a lottery win (13%) to be able to afford a comfortable retirement.

More than a fifth (22%) are depending on relatives no longer being financially dependent on them. The report reveals that as many as 1.9 million older workers currently have financially dependent parents or children.

More than one in ten (13%) or 1.3 million over-50s workers say they are relying on a lottery win to afford a comfortable retirement, despite the odds of winning the National Lottery top prize being one in 45 million.

Peak earnings – or the highest amount of income earned during their lifetime – begins at the age of 51 on average, with this period lasting for an average of 5½ years. Aviva says this potentially provides a window of opportunity for people to boost their pension savings ahead of retirement. However,  only 12% say they have or would increase contributions to an existing workplace pension during this time, rising to just 14% among those who expect to retire within the next two years.

The cost of living is a key factor disrupting older workers’ saving plans: with inflation at a five year high, a third (33%) of workers aged 50+ say their ability to save is hampered by having no money left after paying for everyday living costs. Other factors scuppering their ability to save are the need to pay off a mortgage before retirement (felt by 39% of those with a mortgage) and having financially dependent children (18%).

Based on the experience of older workers, Aviva says those who have taken action to prepare for retirement tend to do so in their late thirties and forties, with pension saving being taken seriously from the age of 39 on average.