Money MATTERS Are you saving enough for your retirement?

What sort of retirement are you set for?

The Pensions and Lifetime Savings Association (PLSA) have set out a series of rules of thumb that people could use to help work out how much they need to save over their working life in order to achieve a certain standard of living once they hit retirement.

These then marry up with definitions of retirement living standards set out by the Pensions and Lifetime Savings Association (PLSA): ‘minimum,’ ‘moderate’ and ‘comfortable.’

What kind of retirement do you want?

Here is what those definitions mean - and what you would need to save in order to enjoy them.

Minimum

The minimum living standard covers all basic needs, and then some money left over to cover for fun, whether that is going out with friends or attending social occasions. According to the PLSA, this would be enough to cover holidays in the UK, eating out once a month, and enjoying some simple leisure activities around twice a week.

This would equate to around £10,900 per year for a single person and £16,700 for a couple.

This is achievable through the combination of the State Pension and saving at the current 8% minimum contribution level for workplace pensions.

Moderate

A moderate lifestyle offers added financial security and more flexibility.

In the examples given by the PLSA, this could include a two-week holiday in Europe and eat out a few times a month, as well as “have the opportunity to do more of the things they want to do.” This is calculated as requiring £20,800 a year for single people and £30,600 for couples.

This is achievable based on monthly pension savings coming to around a quarter of average full-time savings. This is worked out at being around £800 a month, and while that sounds a scarily large amount, remember that this is per household and that it includes contributions from employers as a result of workplace pensions.

Comfortable

Finally, there is the comfortable level of retirement living, which the PLSA suggests you will enjoy regular luxuries (beauty treatments and the like), theatre trips and three weeks in Europe each year.

This is likely to require a pension pot of around £33,600 a year for single people, or £49,700 for couples according to the PLSA.

At Brian Mole IFA Limited we have many years of collective experience in providing clear, easy to understand independent financial advice for all our clients new and old, looking for guidance during their working lives and at the point of potential retirement.

The 3 most stressful experiences in later life are divorce, bereavement, and retirement.

You need to fully understand all your options available before you make crucial life changing financial decisions at the point of potential retirement.

We are here to help and welcome the opportunity to speak to you at any time when retirement advice is required.we will always discuss your situation in plain English.