Record number of people now saving enough for retirement
Written on 24 June 2015
People are now saving more than ever before towards their retirement but while 56% of people are saving enough money each month to fund their retirement, the rest of us aren’t and around 20% of people are saving nothing at all, according to a new report.*
Saving for retirement
As well as contributing to a pension, people are saving on average an extra £142 a month towards their retirement (that’s 8% more than a year ago). And around one in five people expect to save more than this over the next 12 months.
But 6.2 million people (20%) are saving nothing at all and a similar number of people (19%) have no savings or investments whatsoever. Those most likely to be saving nothing are the self-employed, people who work in small businesses and those on low incomes.
How much retirement income will you need?
Many people are also likely to fall short of their desired retirement income, says the report. People aged between 30 and 65 earning the national average income believe they would need £23,469 a year in retirement to feel comfortable. But people saving at the current average level can expect an annual retirement income of just £15,600 – that’s an annual shortfall of over £7,800.
What you can do
If you’re worried you might not be saving enough for your retirement there are several things you can do.
First, find out how much income you currently are on course to have in retirement. Our guide on how much pension will you get can help you work this out.
Next, think about how much you’re likely to need in retirement and set a target income. Our guide on what your budget might look like in retirement is a good starting point.
If there is likely to be a shortfall between how much you need and how much you’re likely to have then you can start looking at ways to improve your situation. See our guide on planning for retirement for ideas.
* The Scottish Widows UK Retirement Report 2015.