Lower wage growth could have a significant impact to a number of people’s retirement plans, as it has led to smaller pension contributions(1). As a result there has been a gap in ‘real earnings’, affecting the current living standards of many people.
Why? As salaries have not increased, neither have the size of pension contributions, leaving a 13% hole in the pension pot at retirement of the average UK worker. What this means is that those approaching retirement may need to work for an extra two years to make up the shortfall, or accept a lower standard of living post retirement.