The pretty market town that’s home to the UK’s richest pension savers

are still on track for a poorer retirement following the pandemic, but residents living in Wokingham have the smallest pension gap in the UK.

The pension gap is the amount needed to make up the income that’s required for a moderate retirement, according to Hargreaves Lansdown.

The percentage of households on track for a moderate has fallen to just 36.4% according to the financial adviser’s savings and resilience barometer.

The average household is £31,546 short in their total savings of the amount needed to give them a moderate standard of living in retirement.

A moderate retirement income is defined by the Pensions and Lifetime Savings Association’s retirement living standards as being £31,000 for a single person and £41,000 for a couple.

In , residents have an average pension gap of £265, the smallest gap in the UK.

Wokingham, which is in the county of Berkshire, was famous for supplying bells for churches across the south of England and was a centre for the silk industry and brewing during the 16th and 17th centuries as well as supplying bricks to all parts of the UK in the 19th century.

Savers in Kingston upon Hull are the poorest outside London, with an average of £54,641 short of what is needed for a moderate retirement.

In Brent, London, the pension gap is a whopping £75,203, the highest in the UK.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said rising inflation had boosted the amount of money needed for a moderate retirement, with the pension gap opening up to £31,546 – four times more than it was in 2019.

She added that when looking at the median pension gap in isolation, authorities around London make up the majority of the bottom 10 with pension gaps of over £70,000.

10 local authorities with the smallest median pension gap

10 local authorities with the largest median pension gap

How to close the pension gap

Allowing people to consolidate pension pots 

Morrissey said: “Moves to reduce lost pensions and the proliferation of small pots will do much to ensure much needed pension savings do not go astray so people know how much they have. We urge the government to continue to look closely at the potential of the Lifetime Pension to boost engagement as well as competition in the industry.”

Increasing auto-enrolment minimums

At the moment, employers are only compelled to save up to 8% into their employees’ pensions. Morrissey said: “At HL we have argued that there are other ways to incentivise pension saving. For instance, the potential to receive a higher employer contribution if you increase your own would provide a real incentive for those with the money to spare without forcing those who don’t have the money to boost contributions to a level they can’t afford. Employers would also find their extra pension spend directed towards those who are engaged with their pensions.”

Helping the self-employed save more into their pension

This is a group that lags behind when it comes to retirement provision, with experts concerned by recent reports that the government is considering the future of the Lifetime ISA, said Morrisey. She explained: “This is a product that could play a major part in boosting the retirement resilience of this group who may need a more flexible solution than a pension. The ability to access your money in times of need -albeit subject to an exit penalty makes the LISA a compelling prospect for this group.

“Moves to reduce the exit penalty from 25 to 20% and widening the age criteria to enable a LISA to be opened by older workers could make it more useful still.”