How much do you need to retire?

For both private and public sector employees the end of final pension schemes is proving to be a worrying time.

Fewer people will be able to retire at 65, and enjoy a lifestyle of cruises and holidays, and a luxurious lifestyle.  The almost extinction of final salary pension schemes and the volatile economic climate, together with an increasing age of retirement is proving to be an unstable and worrying environment for those approaching retirement.

The pension system in the UK has shown weaknesses for many years, with an ever increasing gap between the income people need for a comfortable retirement and the pension provision they are on target to receive.  

Those seeking to retire this year can expect to live on an average income, including private, company and state pensions of a little offer £15,000, recent research from Prudential has revealed.  This is more than a 15%  fall in 5 years, when annual income was £18,600.  

The research shows that 40% of those about to retire do not feel they have saved enough to secure a comfortable financial future, with 20% expecting to live on less than £10,000 per year.

Many pensioners and those approaching retirement age are concerned that retirement incomes are declining, whilst expenditure is increasing.  

To give you an idea of who much you should be investing into a pension scheme, a 30 year old should be saving £160 per month (based on a growth rate of 7% and inflation of 2.5%),  to achieve a yearly income of £20,000 when they retire at 65.

However, delaying starting a pension may have devastating effects of the pension fund.  If a 30 year old delays starting a pension until they are 40, and still aspire to retire on £20,000 income per year at 65, they are required to invest £370 per month, an increase of £210.  

For pension advice or for a review of your current pension provision contact us today on 01572 770552 or  

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