Quarter of savers think £11k pa sufficient at retirement

Over a quarter (26 per cent) of savers think £11,000 a year is sufficient to live on at retirement, research from Portafina has revealed.

The figure is nearly £23,000 less than the recommended ‘comfortable’ standard, as outlined by the Pension and Lifetime Savings Association (PLSA) Retirement Living Standards.

Furthermore, nearly a third (32 per cent of savers) did not have a personal pension to support retirement savings, which Portafina emphasised could see a £500,000 shortfall should savers rely on the state pension alone.

Whilst a third of savers expected the state pension to fund their retirement income, the firm highlighted that even the full state pension would only cover a quarter (26 per cent) of the income needed for a ‘comfortable’ standard of living.

Caseload figures published by the Department for Work and Pensions last year also revealed that less than half (44 per cent) of new pensioners receive the full state pension.

However, the research revealed “signs that Brits are more realistic” about when they will receive their state pension, with the majority predicting they’ll be 69 before receiving weekly payments.

Commenting on the research, Portafina managing director, Jamie Smith-Thompson, said: “Knowing how much money is needed to live comfortably in retirement has understandably got Brits scratching their heads.

“And with the state pension age set to continue to rise, it’s more important than ever to make sure retirement savings are geared up for the lifestyle you hope to achieve."

The also follows the JRF’s annual report on UK poverty, which revealed that pensioner poverty was once again on the rise following a five year decline.

The Pension Regulator’s DC Trust Report echoed this message, revealing that while member contributions had risen by 55 per cent over the past year, average assets per member at retirement had fallen by 43 per cent.

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