Fewer than half (45%) of those who could and should be preparing financially for retirement are currently saving enough. A Scottish Widows survey has suggested an average UK adult should be saving at least 12% of their income or expecting their main retirement income to come from a defined benefits pension.
Against the backdrop of increased costs of living, pressure to provide for children in education or generally to afford day to day expenses, and mortgage debt payments 20% of UK adults aren’t making any pension provision at all.
A shocking shortfall
But interesting our aspirations for retirement income have continued to grow to an average income level of £25,200 a year for a 70 year old. Based upon the average pension provision being made, many people will be bitterly disappointed when they reach 70, with their total income likely to be less than half of what they are hoping for.
Shockingly the average pension fund shortfall could be around £430,000!
An even more frightening statistic is that the 800,000 babies born in the UK last year will need to save £2.4m into their pension to retire comfortably.
This just shows that it’s never too early to start saving for your or your loved ones’ retirement, as I blogged about in my ‘Make your grandchild a millionaire’ article back in November last year.
Get a plan
But it’s not just about pensions, it’s about more holistic retirement planning. And even more importantly I believe it is about understanding what is important to you and being clear about the life you want to live in retirement. Having a clear end goal in mind will enable you to establish the amount of money you need to save to achieve your desired lifestyle.
Furthermore who says you have to retire? Retirement shouldn’t just be purely a financial goal. It should be part of your life goals.
Averages are all very well, but when it comes to planning your retirement happiness, your goals and aspirations should be the starting point.
As always, get in touch if we could help you plan for your or your loved ones’ future and deliver Retirement Happiness™.
Source: The 9th annual Scottish Widows Pensions Report