People planning for their retirement have been urged to build up a private pension as the state pension may not be enough to cover their living costs.
David Lane, chief executive at pension provider TPT Retirement Solutions, urged people to pay into their pensions given current costs.
He told Express.co.uk: “The Pensions and Lifetime Savings Association has calculated the minimum amount needed to retire is £14,400 a year for a single person or £22,400 for a couple.
“As the full state pension is currently £11,502.40 per year, anyone relying solely on it for retirement income will struggle to afford to stop working.
“It is therefore important to build up other savings to help cover the cost of retirement. The tax relief available through a workplace pension or a SIPP if you’re self-employed makes them one of the best ways to save for retirement.”
Mr Lane said workers of all ages should be paying into a pension to build up their funds for their retirement.
He explained: “It is much easier to build a substantial pension pot if you start saving early because cumulative interest will ensure your pot steadily grows over time.
“Increasing the amount of your salary you contribute to your pension, even if it’s just an additional one percent each month can also make a huge difference to the size of your pot when you retire.
“Even if you’re older, you could still benefit from saving into a workplace pension. The tax relief and employer contributions can help you build up your pot more quickly than other types of saving.”
Pensions provider Standard Life recently called for the auto enrolment standard amount to be increased from eight percent to 12 percent.
The group claimed this would add £96,500 to younger workers’ retirement pots, with total workplace pension contributions increasing by around £10billion a year.
Andy Curran, chief executive officer of Standard Life, part of Phoenix Group, said: “Increasing minimum auto-enrolment contributions is fundamental to addressing this challenge, particularly as many people are unengaged with their pension or have low confidence in their pension knowledge.
“Alongside the benefits for future retirement incomes, there is a wider economic benefit that pension capital can play in driving investment to sustainable and productive assets, ensuring optimal outcomes for savers remain at the centre of investment decisions.”
The current auto enrolment rules mean anyone aged 21 and over who earns £10,000 a year or more is auto enrolled. This is being expanded with anyone aged 18 and over to be eligible and for any level of earnings.
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