This totals to £560,000 if you retire at age 68. There are several ways you can boost your pension if this amount feels unrealistic.
Latest figures from Pensions UK’s ‘retirement living standards’ show that retirees now need a yearly minimum of £13,900 to retire – that’s without a car, holidays abroad, and £20 Christmas gifts for your family.
According to Standard Life that’s roughly £210,000 in total if you want to retire by age 68.
The current state pension is just over £12,547, so you will need more than that to get by.
However, if you are wanting to live a little bit more luxuriously, with a two-week all-inclusive holiday to Europe in a 3-star hotel every year, a small car replaced every seven years, and at least £1,000 a year to treat your kids and grandkids – you’ll need £45,400 as a couple.
Or, individually you’d need £32,700 a year.
This equated to around £335,000 needed in your total pot.
If you wanted an even more comfortable retirement, replacing your car every five years, to head on a few staycations as well as a holiday to the mediterranean and £1,000 a year to spend on family – you’ll need £45,400 a year, or £62,700 for two people.
This means by the age of 68, you would need a huge £560,000 pot.
It is claimed that less than one in ten Brits have enough money to retire comfortably.
Fidelity pensions expert Jemma Slingo said that making small payments can total up to high amounts in the long run.
She said to the Sun: “Take someone aged 40 who earns £40,000 a year. By putting an extra 2 per cent of their salary into their pension, they could have an extra £71,100 by the age of 68.”
That would equate to an extra £16 a week or £2.30 a day.
Jemma adds: “Sometimes it pays to think small.
“Saving a little bit more each week can transform how much money you have in later life – and feels reassuringly achievable.”