Britain’s pension reality
Posted on: 20 July 2018 by Dawn Richard
How much will you need to save for your retirement?
Because you only rely on a pension in later life, it’s very easy to push it to one side, especially if you have more pressing financial matters. However, this mentality is changing and Britain is now waking up to the importance of pensions and financial planning for their future — as True Potential Investor’s Tackling the Savings Gap Consumer Savings and Debt Data Q4 2016 report shows.
The report, from True Potential Investor, is carried out on a quarterly basis and looks at consumer attitudes to savings and debt. The Q4 2016 report showed that 74% of the poll’s respondents contributed to a pension, compared to 26% of those that did not. This shows a 9% decrease against Q3 2016.
It’s promising to witness the growth in the number of young people putting money into their pension too. Just 13% of 24-34 year olds made no contribution to their pension in Q4, down from 19% in Q3 2016.
As we become more aware of our pensions, the total amount we’re contributing on average is climbing. According to the Q4 2016 report, we’re putting away £544 per month on average to our retirement fund.
Underlining a disparity in attitudes in the country, Northern Ireland interestingly has the second largest proportion of people who added nothing to their pension. The South West had the highest percentage of zero pension contributors, with 40%.
So which region has the most pension savers? London took the top spot, with just 18% of those who responded to the survey failing to contribute. In second place was the North East with 22%, followed by Scotland and the West Midlands both with 27%.
According to the report, we’ll need £23,000 per year to live comfortably in retirement— so how close are we to hitting this goal? Based on our current saving rates, we’re on course to receive just £6,000 per year from our pension pots.
This is, of course, only intended as a guide; how much you’ll need will be dependent on your pre-existing finances and the life you’d like to lead. However, a new tool by True Potential Investor can give you a better idea of the size of the pension pot you’ll need.