It seems that on average, in the UK we are underestimating the amount of money we'll need to retire by £169,000, according to research by MoneySupermarket and this is backed up by Government figures which indicate that around 12 million people may be under-saving for their retirement.
The average pension pot can require as much as £370,000, according to Which?, but the British public appears to think this figure is significantly lower.
British people’s lack of knowledge about pension planning is also highlighted by the discovery that 48 per cent of respondents had no idea how much is in their pension pots. Furthermore, 26 per cent do not have a pension and this figure rises to one in three when considering just millennials (aged 18 to 34).
Regionally, Londoners are the biggest savers, with £14,611 saved on average, despite the high cost of living. This is 55 per cent more than those from the West Midlands, who have saved the least on average, despite being most aware of their pension pot amount. Only 35 per cent of East Anglian respondents were aware of the actual amount in their pension pot.
Scottish and Northern Irish respondents were the most prepared for their futures, with the majority of respondents revealing that they have life insurance.
Overall, respondents from the north of the UK underestimate the recommended pension pot amount by nearly 10 per cent more than those from the south.
As many middle aged Brits haven’t started to plan for their retirement – and may be leaving it too late to ensure they have sufficient savings – one of his recommendations was the creation of a mid-life ‘MOT’ to help individuals plan for later life - their skills, paid and unpaid work, and their retirement income.
This is supported by the Centre for Ageing Better, working in association with The Pensions Advisory Service, Mercer and Aviva.
Brunsdon Financial Services Ltd. Chairman and Financial Adviser Brian Morman commented, “It’s understandable that the cost of everyday living can seem more important than longer-term objectives such as saving for retirement - especially if we’re not fully aware of how much we’ll need in retirement. But at Brunsdon we firmly believe that it’s never too early to develop a retirement planning strategy. We are tending to live longer and as a consequence are likely to spend more time in retirement. We’ll therefore need even more income then to maintain a comfortable lifestyle. So whether you require a mid-life financial ‘MOT’ to ensure you are on track, or would like to discuss how our focused advice and financial planning strategies can help you, I would urge you contact us as soon as possible. When it comes to retirement planning, time is often of the essence.”
Please note that this article is for information only and does not constitute specific advice. Brunsdon is not responsible for the content of third party web sites.