The average UK adult could have almost £10,000 in extra annual income in retirement by cutting back on life’s “little luxuries”, new research has found.
According to Scottish Widows’ Retirement Report 2017, the average Brit will spend £124 per month on every-day luxuries such as takeaways and taxis, while 32 per cent of people say they “simply cannot afford to save anymore”.
The figures, based on a 22-year-old saving £124 a month and retiring at 68, show that if invested into a pension and matched by the employer, retirement savings could increase by £9,853 a year.
Scottish Widows retirement expert, Robert Cochran, said: “January is traditionally a time when we set out to improve our financial habits for the year ahead and while it would be unrealistic to suggest we live entirely without little luxuries, there is an important message about the need to ensure untracked spending today doesn’t harm our financial security tomorrow.”
A new year brings new saving hopes, as 62 per cent of people have set a financial goal in 2018, while 33 per cent of people will cut back by an average of £109.03 in January.
Scottish Widows found that most people underestimate how much they spend on little luxuries by £74 a month, while 12 per cent of people admit to not tracking spending at all.
He added: “Our retirement report shows almost 23 million people are failing to save adequately for retirement, and so there is no time like the present to make the first step towards positive change. It can also help build a longer term saving habit and make a real difference to quality of life in retirement.”