If one of your New Year’s resolutions was to finally get around to start tackling your pension requirements by putting some of your hard earned money away for later in life, then new analysis suggests that an average UK earner requires a pension pot that is over £300,000 to maintain their current lifestyle in retirement.

The results of research conducted by Aegon show that those on average incomes require a pension pot of £301,500 if they wish to continue their lives through retirement. An annuity based on that figure equates to a guaranteed income for life of £808 per month, increasing with inflation. 

For those earning £13,000 and £56,000, the equivalent retirement pot is £65,300 and £612,700 respectively, to maintain working age lifestyle. 

The review also highlighted that there are around 12 million people under saving – life expectancies have grown significantly in recent decades and long-term interest rates, on which annuities are based, are currently extremely low.

This study follows the government’s 2017 auto-enrolment review, which concluded that to maintain a lifestyle into retirement, individuals need to aim for a target percentage of income from their pre-retirement years. 

Clearly, the earlier you take steps to put a bit more aside, the better – and if you are already aware that you have yet to tackle your pension situation, now is a good time to do so. For those already contributing to a workplace pension scheme, perhaps another proactive New Year’s Resolution would be to ask your employer if they’d be prepared to match any increase you make with an increased employer contribution.

Here at The Financial Planning Group, we have specialist software that can test various scenarios so that sensible decisions can be made on how much money is really enough to enable retirement and to make sure that you won’t run out of money at some point in the future.
We are proud of our reputation of providing independent financial advice and solutions to individuals, families, companies, trustees, accountants and solicitors. We are fee based and unbiased, working with our clients to realise their financial goals by placing their financial affairs in context with their future goals and aspirations.
We provide a simple, structured, disciplined and reviewable planning service. We will change the fundamental relationship people have with their money to give them confidence and clarity in their own future.
If you would like to arrange a pension or investment consultation, please call Tim Norris or Alan Clifton on 0800 731 7614 and we would be delighted to arrange a meeting at our offices in the heart of Teddington.
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