- On July 8, 2017
Couples who want to enjoy their retirement in comfort need to be squirreling away at least £131 a month from the age of 20, new research suggests.
This figure rises to £198 a month from 30, £338 a month from 40 and £633 a month if you don’t start saving until you’re 50, if you ‘re looking to secure an annual household income of £26,000, according to a survey by Which?
The consumer group said that with more and more people contributing to company pension schemes through auto-enrolment, and the new pensions freedoms giving people more control over their retirement income, it’s never been more important to know what you’ll need in your old age and how much you should be saving now.
At Faron Partnership we can help you plan for the retirement you want and let you know whether you are on track or whether you need to take any action.
The examples above show the cost of delay if you are saving for retirement, so it’s best to do something sooner rather than later.
We also help the nearly-retired and already retired to work out how best to use what they have accumulated. There are lots of options and everyone is different so there is no one size fits all solution.
According to the survey of 1,600 retired couples, an income of £18,000 a year was needed to cover household essentials such as food, utilities and transport. If they wanted to enjoy luxuries such as foreign holidays and leisure activities, this figure rose to £26,000 a year.
To generate this level of income a couple would need a defined contribution pot of £210,000 at today’s prices, alongside the current state pension.
Which? said that in calculating its figures is assumed the sum saved receives tax relief at 20% and the sum saved is assumed to grow at 3% after charges.
The £210,000 is for the initial pot which then goes into income drawdown at retirement.
For a free consultation about your financial needs call 0118 974 0159 or email firstname.lastname@example.org.