You are here: Home - Retirement - Retirement planning - News -

The amount you need to save a month for a comfortable retirement

0
Written by: Paloma Kubiak
19/04/2017
Brits wanting a comfortable retirement with a household income of £26,000 need to save at least £131 a month from the age of 20, according to new analysis.

Savers starting from scratch later in life, at the age of 30, need to squirrel away £198 a month, and for those saving from 40, the figure jumps to £338 a month.

The research, published by campaign group Which?, said those starting their pension pot at 50 need to save £633 a month to achieve an annual income of £26,000 for couples.

The average retired couple needs £18,000 a year to cover household essentials such as food, utilities, transport and housing costs, according to Which? But an annual income of £26,000 would allow couples extras such as a European holiday and leisure activities.

To achieve a £26,000 annual household income – and factoring in basic 20% tax – they would actually need £26,750 gross.

A £26,000 annual income requires a £210,000 defined contribution (DC) pot in today’s money, alongside the state pension.

Which? surveyed 2,700 retired and semi-retired couples and more than half said they could afford most extras they wanted. One in five households were semi-retired, topping up their pension with income from part-time work, which produced an average £8,490 a year for a couple and £6,412 for individuals.

It also found those who didn’t have enough money tended to downsize to unlock cash from their home, while others used equity release which allows them to stay put and borrow money against the value of their property.

Which? said that as a general rule, savers need to aim for a retirement income that’s two thirds of their salary.

Gareth Shaw, money expert, said: “When it comes to saving for your retirement: start early and save often. Being a part of your company pension scheme is a good start, but, depending on how much you contribute, you could well need to save a little more to have the lifestyle you want in retirement.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Insurance Experts: Are you fully insured? Click here to get a quote.

For a free quote or to speak with an insurance expert call 0800 1218744

Should you go private rather than make an insurance claim?

If you’ve experienced a minor bump with another driver, you may be tempted to settle the costs privately witho...

Help, my neighbour has damaged my property. What are my rights?

Buying and maintaining a property is expensive so if a water leak from your neighbour damages your home, what...

Fixed rate savings: monthly or annual interest?

If you’re looking to lock your savings in a fixed rate product, you may need to decide between monthly or annu...

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
pensioner income, new state pension
Cost of equity release at record low level

Equity release lenders have driven down fixed rates to new lows, as competition in the sector hots up, said Moneyfacts.

Close