It has also estimated the monthly cost of essentials is going to increase by £200 over two years, which will limit households’ ability to save toward retirement.
Scottish Widows head of policy Pete Glancy said: “We are facing a myriad of issues and there are no easy solutions.
“It’s sadly understandable that households are being forced to make some tough choices in their budgets, but it’s important they do so whilst taking a longer-term look at their finances.
He noted that as a guide, individuals should “look to save a minimum of 12 per cent of their salary to secure a consistent quality of life, but aiming for at least 15 per cent is more likely to provide a comfortable retirement”.
However, Glancy noted that the “public policy aim should not simply be to help people accumulate the largest possible pension pot, but to explore creative and holistic solutions to help them enjoy the best possible standard of living in retirement”.
calum.kapoor@ft.com
