How much to save for re­tire­ment

Here’s how to reach your re­tire­ment sav­ings tar­get – what­ever age you start sav­ing

Kent Messenger Maidstone - West Kent Property - - BEAUTIFULHOMES -

The drive to en­cour­age work­place pen­sion sav­ing has put many peo­ple in charge of their fu­ture re­tire­ment in­come.

But how much should you be sav­ing if you want to keep up the kind of lifestyle you’re en­joy­ing now?

While ev­ery­one’s needs are dif­fer­ent, consumer group Which? has un­der­taken re­search that sheds some light on the is­sue.

A sur­vey of more than 1,500 re­tired cou­ples found, on av­er­age, re­tired cou­ples said they needed £18,000 a year to cover house­hold essentials – such as food, util­i­ties, trans­port and hous­ing costs.

But for a slightly more com­fort­able lifestyle, which al­lows for ex­tras such as Euro­pean hol­i­days and leisure ac­tiv­i­ties, they needed an an­nual in­come of £26,000.

The consumer group cal­cu­lated that to gen­er­ate an an­nual in­come of £26,000, a cou­ple would need a de­fined con­tri­bu­tion pot of £210,000 in to­day’s money – along­side their cur­rent state pen­sion en­ti­tle­ment.

The cal­cu­la­tions make cer­tain as­sump­tions and as such they are an in­di­ca­tion of what peo­ple might need to save to achieve the lifestyle they ex­pect rather than a pre­cise pre­scrip­tion.

While some of the fig­ures may look a lit­tle daunt­ing, they do show why it’s a good idea to start the sav­ings habit young – es­pe­cially if you’re hop­ing to spend your re­tire­ment sip­ping cock­tails by a pool.

En­cour­ag­ingly, the fig­ures also show that even if you’re start­ing to save later in life, it is still at least pos­si­ble to build up a de­cent-sized pot.

Which? has a free on­line guide at save­for­re­tire­ment to help peo­ple plan their re­tire­ment sav­ing. Free guid­ance is also avail­able to those near­ing re­tire­ment from the gov­ern­ment-backed Pen­sion Wise service.

Picture: PA Photo/think­stock­pho­tos

Which? re­search sug­gests how much peo­ple should save for later in life

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