New research by high-interest savings platform Flagstone shows that just 14% of people are ‘on track’ to retire at their desired age with their desired income. The consequences extend beyond individual finances and into business cost forecasting, succession planning, and workforce strategy.
The research found that, on average, respondents would like to retire at 61. Based on current savings and contribution levels, Flagstone’s modelling suggests most won’t be financially able to do so until 83 – a 22 -year gap between expectation and reality.
These findings coincide with the UK government’s recent revival of the Pensions Commission, amid growing concern that future retirees may be financially worse off than current generations.
Flagstone calculated each person’s retirement pot ‘target’ using the 4% withdrawal rule. Each respondent’s projected retirement pot was modelled using a 5% annual growth rate and their current yearly contributions. Respondents were classed as ‘on track’ if their projected pot would meet the amount needed for their chosen retirement income and age.
The business impact of delayed retirement
When employees remain in their roles longer than planned, the financial impact for businesses is direct and measurable. Staff who have been with a company longer typically earn more and receive higher employer pension contributions – both of which stay on the payroll beyond what was originally budgeted for.
Labour market data underlines how significant this shift already is. In 2025, 71.6% of people aged 50 to 64 were in employment, up from 57.2% in 1995. As retirement ages continue to drift later, CFOs and finance teams face a structural challenge: payroll models built around expected retirement timelines may drift significantly from reality.
Succession planning is affected too. When senior employees remain longer than anticipated, career progression for mid-level staff slows – increasing the risk of disengagement and attrition among the talent businesses are most reliant on to fill future leadership roles.
Retirement readiness by industry
Flagstone’s analysis reveals significant variation in retirement readiness across sectors. No industry studied is ‘on track’ as a whole, but the gap is considerably wider in some than others.
| Industry | % On track for retirement | Avg. gap between desired age and projected retirement age |
| Arts & culture | 21.7% | +15 years |
| IT & telecoms | 18.6% | +16 years |
| Finance | 21.2% | +16 years |
| Sales, media & marketing | 18.8% | +19 years |
| Manufacturing & utilities | 12% | +19 years |
| HR | 10.9% | +20 years |
| Healthcare | 14.8% | +21 years |
| Legal | 8.7% | +22 years |
| Architecture &engineering | 12.8% | +23 years |
| Retail, catering &leisure | 9.3% | +25 years |
| Education | 8.5% | +25 years |
| Travel & transport | 4.7% | +28 years |
Workers in travel and transport face the largest gap, with just 4.7% on track and an average projected shortfall of 28 years. The education and retail, catering and leisure sectors follow closely behind. At the other end of the scale, arts and culture (21.7%), IT and telecoms (18.6%), and finance (21.2%) are the closest to meeting retirement income targets.
What finance teams can do now
The effects of delayed retirement may not be immediate, but they are predictable. Finance teams that plan ahead will be better placed to manage the costs when they materialise.
Practical steps include:
- Stress-testing payroll forecasts against delayed retirement scenarios: assess the cost implications of senior employees remaining in employment for three, five, and ten years beyond their expected retirement date.
- Reviewing succession timelines: identify where delayed exits could create bottlenecks in leadership pipelines and update talent plans to reflect the new reality.
- Investing in employee financial wellbeing: businesses that help employees improve their retirement readiness – for example through salary sacrifice schemes, gradually increasing pension contributions, or access to financial planning support – may find it easier to manage workforce transitions on their own terms.
- Considering phased retirement options: structured transitions, where employees gradually reduce hours before fully retiring, can help manage costs and retain valuable experience while creating space for the next generation of leaders.
Katie Horne, savings expert at Flagstone comments on the findings:
‘The fact that only 14% of people are on track to retire when they want to is a significant finding – not just for individuals, but for the businesses that employ them. A workforce that retires later than planned is a workforce that costs more than planned. Finance teams that aren’t already modelling this risk may find themselves caught out.
This isn’t a future problem – the data shows it’s already here. The share of over-50s in work has grown significantly over the past three decades, and there’s little to suggest that will change any time soon.
The businesses that will navigate this best are the ones that treat retirement planning as a financial risk to manage now, not a people issue to deal with later.’
View the full study here.
