Millions of Brits have moved a step closer to achieving the retirement they want in the past year, new research shows.

For some, increasing the amount they pay into a pension pot has made all the difference.

For others, it’s simply a case of being more realistic about the level of retirement income they are likely to receive.

According to pensions provider Aegon, 12% of the UK population are now on track to achieve the retirement they aspire to have – up from 7% in April 2015.

Aegon said 15% of Brits are saving more into their retirement fund as a direct result of pension reforms introduced by the government.

The pensions penny is finally beginning to drop for the UK’s retirement savers

Steven Cameron, pensions director, Aegon UK
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Average annual income expectations have also fallen from £42,000 in April 2015 to £38,000.

As a result, the gap between the retirement income people would like and what they are on course to receive has narrowed by £6,600 over the past 12 months – although the gap still stands at £24,000.

More people are thinking about their retirement than a year ago. Image by ja-images/Shutterstock.com

The research also found that people are engaging more with their pension savings. 

A quarter (24%) have checked the performance of their retirement savings in the past six months and more than a fifth (22%) have taken steps to review their retirement plans. 

These figures are up from 19% and 18% respectively in April last year. 

Steven Cameron, pensions director at Aegon UK, said: “We’re seeing a seismic shift in attitudes towards saving for later years, with 12% of the population now on track for the retirement they want. 

“Across the UK, this means 2m people have improved their saving behaviour, or changed their aspirations for retirement.

“As we enter an era of personal responsibility for retirement saving, it’s clear that the pensions penny is finally beginning to drop for the UK’s retirement savers.”

Mr Cameron said the government’s pension changes appear to have grabbed the public’s attention. 

“It’s heartening to see people being motivated to engage with their future and meet the challenge of funding and planning for their retirement.” 

But he warned: “The job is far from done. 88% of the population are still falling short of their retirement targets. 

“At this critical juncture, the industry and government need to band together to ensure that consumer confusion doesn’t creep back in. 

“This means ensuring that new initiatives, such as the Lifetime ISA and the secondary annuity market, are clearly articulated, and don’t detract from the progress that auto enrolment, and the pension freedoms have already made.

“Only then will the UK continue to thrive in their planning for later life.”