The majority (92 per cent) of high-net-worth-individuals are underestimating how much money they need in retirement, according to the inaugural Saltus Wealth Index, with the average respondent misjudging the amount needed by almost half.

The index, which surveyed savers with investable assets of more than £250,000, revealed that around 64 per cent expected to need an income of more than £50,000 a year, whilst 13 per cent felt they would need at least £80,000.

On average, respondents aimed to achieve a retirement income of £53,000 a year, estimating that this would require a pension pot of £729,000.

However, Saltus clarified that in reality, retirement savings of around £1.3m would be needed to fund this income, almost twice the average estimate.

The findings also suggested that the higher the net worth the more respondents expected to need to fund a comfortable retirement, however, as those with investable assets of between £250,000 and £499,999 expected to need £45,000 on average, whilst those with £3m and over anticipated needing £72,000 a year.

Saltus partner, Michael Stimpson, commented: “Our inaugural Saltus Wealth Index highlights some important issues around expectation versus reality when it comes to wealth with a clear misunderstanding surrounding how much money is needed for a comfortable retirement.

“If anything, the perception gap between expectations of what will be needed and what is actually needed could get bigger as life expectancy continues to grow - living to 100 could become commonplace, and the impact that will have on retirement planning could be huge.

“Rising life expectancy is going to impact millennials the most, and this is the group, according to our research, that are the least realistic about what they will need in retirement.

"This not only highlights the importance of having a robust financial plan in place, but also, that it is never too early to start investing in your future.”

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