The average Brit underestimates the amount of money they need to retire by £169,000, according to new research by MoneySupermarket.
The average pension pot can require as much as £370,000, according to Which?, but Brits appear to think this figure is significantly lower.
British people’s lack of knowledge about pension planning is also highlighted by MoneySupermarket’s 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 – 34).
A MoneySupermarket spokesperson commented: “Brits face all sorts of calls on their money and it’s easy to see why the cost of everyday living can trump longer-term objectives such as saving for retirement - especially if you’re not fully aware of how much you’ll need in retirement. But anyone who can get into the savings habit gives themselves a better chance of building up the sort of pension kitty that’s needed to fund a comfortable lifestyle once they stop work.”
Despite 59 per cent of Brits acknowledging they have financial dependants, only 33 per cent have life insurance and 48 per cent do not plan to take out a policy.
The spokesperson added: “Anyone who has dependents should make life insurance an absolute priority, as the financial consequences of an early death can be catastrophic. Policies can be set up to pay off a mortgage and other debt, and also to provide money to meet the day-to-day financial needs of those left behind if the policyholder dies.”
Women are less likely to have a pension according to MoneySupermarket’s survey, with 29 per cent of female respondents not having one, compared to just 21 per cent of men.
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.