A good pension pot. What does that look like in the UK?

Please read carefully:

Average pension pot in UK: What is a good pension pot?

According to a report published on Telegraph.co.uk last year, the findings of which give a lot of food for thought and may have significant impact on every single one of us, it appears there is work to be done to ensure people prepare for life after active employment.

Key features include:

Average UK Pensions Savings:

According to research by insurer Royal London in May 2018, you’d need a pension pot of ￡260,000 if you want to avoid an uncomfortable retirement. This sum would provide a provide pension income of just over ￡9,000 in addition to the new state pension of ￡8,546.20 a year.

Age - between 25 and 34 (Source Fidelity International July 2018):

Men: ￡142,836

Women: ￡126,784

Projections towards Government retirement age 68 (given Government Pensions Age upward revision)

Age - between 45 to 54:

62% DON’T KNOW how much their pension balance is.

Men and women: ￡71,342 (Source LV= April 2017)

Excerpt:

It found people in this age group have average pension savings of ￡71,342. However, the friendly society’s research found that people expect to need around ￡1,360 a month to live comfortably in retirement and to guarantee this someone retiring at 55 would need to have around ￡311,000 saved.

Worryingly, half of those aged 45-54 didn’t think about retirement at all last year (2017), they spent on average just three hours and 42 minutes planning their retirement, less than the average five hours and 42 minutes time they spent researching their last holiday.

Age – 55 and above:

Men and Women: ￡105,496 (Source: Aegon 2017)

Excerpt:

Typically, a pension pot of around ￡100,000 would provide an annual income of about ￡5,000 in retirement, although the exact amount would depend on your individual circumstances such as your health, precise age and how you chose to draw an income.

Separate research from Scottish Widows in June last year found that someone who has left pension saving to their 50s would need to put away ￡1,445 a month to achieve a ￡23,000 annual income at retirement. 

My take:

The total (private and Government) average pensions, for each of us would be circa ￡17,000 per year or ￡1,416 per month. Please note that some of this might be subject to tax, living costs and travelling costs among others. For most of us this would be inadequate or at best restrict the quality of lives we are able to afford.

According to Joseph Rowntree Foundation (credit JRF.org.uk), about Pensioner poverty: For years, pensioner poverty decreased across the UK, but now those that are single, have non-white ethnicity or have a landlord, are seeing increases.

Pensions and retirement planning is something most of us don’t seem to think about until we need it, which is ironic. We need to begin to think about pensions from day 1 of starting work and actively work towards it, every year.

However, it is never too late. The only option for all of us today is to take action.

-        Do you know what your pension balance is?

-        Do you have frozen pensions balances from previous employment?

-        Do you know what your Government contribution balance is?

To find out more, please call, text or Whatsapp 07863554681 and I’ll put you in touch with a Specialist who will provide a no obligations, comprehensive Pensions and Retirement Plan review at no cost.

Credit: The Telegraph.co.uk – Financial Solutions   

Credit: Joseph Rowntree Foundation - JRF.org.uk

Baba Oyewole FCCA

Financial Consultant and Pensions Advocate

07863554681