Almost half of people under 45 risk retiring without enough saved, as 43% told Sanlam UK they thought a savings pot of £100,000 would be enough to retire on. This would leave them with an annual income of just £5,400.
To give some perspective on this, it was estimated that people need an income of £26,000 per year for a comfortable retirement. This would require a savings pot of £480,000, which is much higher than many may be aiming for.
While 57% are aware that they should be saving more to meet their retirement needs, just 13% think they can actually achieve their goal. Around a third are furthermore pinning their hopes on receiving an inheritance of at least £50,000 to help fund their retirement, which – even if they get a generous amount – likely won't be enough for a comfortable post-work life on its own.
Especially the 33% of under-45s who have less than £10,000 in their pension pot would do well to review their retirement plans before it's too late, as would the 24% who either don't know the value of their pension pot or simply don't have one. Carl Drummond, senior wealth planner at Sanlam UK, said: "Our research confirms what we have long-feared; that people of all ages are simply not engaged enough with their pension and their financial security in retirement.
"People who retire at 65 can easily live for another 20 years – that's 240 monthly payslips they need to have saved to be able to enjoy the same standard of living. While that might sound like a lot, building a substantial pension pot that delivers peace of mind as well as funds in retirement is entirely doable, but it requires forethought and a detailed plan."
Automatic enrolment means that most people should already be enrolled in a workplace pension – if you've been given the opportunity and declined, it might be a good idea to opt back in as soon as you can, as it's a great tax-free way to save with the help of a top-up from your employer. For those who are looking for alternative ways to save for their later life, there's the Lifetime ISA to consider, or if you think you may need access before the age of 60, there's also the regular stocks & shares ISA (provided you're happy to risk your funds on the stock market for the potential of big long-term gains).
Don't want to set aside your funds for too long (yet) and don't want to risk them either? There's always our cash savings Best Buys.
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