‘Generation X’ pension savings insufficient for comfortable retirement

The average pension pot size of people aged 43-54 years-old is only 37 per cent of the amount recommended for a comfortable retirement, research from Salisbury House Wealth has revealed.

With a retirement age of 67 and a life expectancy of 82, the average saver will need £19,000 per year to retire comfortably.

This would mean that those in ‘Generation X’ would need to have already saved £187,400 as of this year, but the average pension wealth of this age group was approximately £70,400.

Furthermore, savers in London and the south east, where living costs are highest, may need a greater income than £19,000 per year for a comfortable retirement.

Commenting on the findings, Salisbury House Wealth managing director, Tim Holmes, said: “There is a big gap between what individuals need to have saved into their pension pot by this point and what is actually the case.

“When you start saving is just as important as how much you save each year.

“In order to have saved enough by your mid-fifties, you need to start saving early. Incrementally building a private pension pot and investing with sensible long term outlook will take you a long way to having the buffer you need when you finally reach retirement age.”

Salisbury House Wealth also found that individuals aged between 24-42 years-old, or the millennial generation, need to have saved £73,500 on average by this year in order to retire comfortably.

Holmes added: “Millennial’s have time on their side and can benefit for longer from the effects of compound returns, which is an incredibly powerful tool.

“It can be difficult to adopt the long term outlook required when saving but the question that needs to be asked is whether you want to just survive in retirement or actually enjoy it.”

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