Half a million pounds: the cost of retirement - Pensions - News - Moneyfacts

News

Half a million pounds: the cost of retirement

Half a million pounds: the cost of retirement

Category: Pensions

Updated: 27/04/2010
First Published: 27/04/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The average UK household will require more than half a million pounds to cover its retirement, a new survey has revealed.

Having studied figures relating to the cost of living, MGM Advantage found that twenty years of retirement will cost the average household £564,227.

However, it is a figure that varies dramatically depending on where people live.

For instance, households in London will need £194,602 more to cover the cost of retirement than those in the North East.

Yet despite the significant and growing cost of living in retirement, the retirement income specialist said a number of factors will see standard annuity rates fall by as much as 20 per cent over the next few years.

These will include the combined impact of people living longer, the effects of quantitative easing and new regulation.

All of these factors make it imperative that people start to save into a pension as early in their life as possible, and make sure they keep track of how their pension pot is progressing.

"There is significant pressure on pensioner income," said Chris Evans, chief executive at MGM Advantage.

"Those people retiring today can expect to live for twenty years but with annuity rates falling and the cost of living rising, funding retirement is a difficult task.

"With such large regional discrepancies in the cost of living in retirement, we wouldn't be surprised if more people considered relocating to other less expensive parts of the country in order to search out a better quality of life.

"They also need to spend more time on ensuring that their retirement income is working as hard as possible for them."

Find the best pension for you - compare pensions.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Savers more worried about looks than pension

When you think of getting older, what’s the first thing that comes to mind? For many, it’ll be fears about their looks – but they should really be concerned about their financial situation.

Pension funds defy uncertainty with strong returns

Economic uncertainty has been a persistent theme in recent months, but happily, not every area has been negatively impacted. Indeed, our latest figures show that the pension sector has bucked the trend and posted unexpectedly strong returns.

Do you know what a pension is?

Pensions are something we all need to get our heads round, and we’re continually told that it’s important to start saving into one from as early as possible. Yet new research suggests that this advice could be falling on deaf ears.
 
Close