‘Thatcher’s children’ expect a pension of £30k a year
According to the Telegraph, the study revealed that 31% of 25-34 year-olds expect to retire on an annual income of more than £30,000 a year. This is higher than the national average salary, which currently sits at £26,100.
To achieve a retirement income of £30,000 a year, those aged 25 today and retiring at 65 would need to put aside £4,950 a year to accumulate a pot of £599,967, assuming an annualised return of 5%.
If they wait until 35 to start investing, they will have to save £9,000 – or twice as much – each year to reach the same goal at the same rate of return.
The increasing financial pressure of everyday living, coupled with leisure spending and fears for their future security, appears to be conflicting with young people’s ideas about their retirement, the report says.