People Don’t Know How Much To Save For Retirement

By Retirement

People want to save for retirement but don’t know how much to put away each month for a comfortable old age, says a new survey.

Looking decades ahead at how much money someone might need to spend is difficult for most people to imagine.

And as pensions and saving becoming more to the fore in personal finance, having a clear idea of what they need to save is important, according to financial firm BlackRock, which carried out the survey.

The firm asked more than 30,000 people in 18 countries about their finances.

They told researchers that the average expected pension income was £23,000 a year.

£7,200 pension shortfall

But the expectation may prove too much for many who said their savings rate was £180 a month over 39 years that will give them a pension pot of £196,000.

The income such a fund may generate is around £7,500 a year, which when added to the maximum state pension of £8,300 a year gives a likely total retirement income of £15,800 – a shortfall of £7,200 a year.

People also told the survey that they were happy to make important financial decisions without taking professional advice.

These included saving for school or university fees; pensions; divorce, leaving an inheritance and some investment decisions.

They would consult a professional over tax planning, home equity release, drawing an income from retirement investments, putting together investment portfolios and long-term financial planning.

Confident over finances

“Saving, family finances and looking for specific investments are among the financial decisions people are happy to make themselves. However, on more challenging financial matters they’re more likely to want an adviser,” said the report.

“Confidence is rising, but many people still don’t feel comfortable making financial decisions

“Although Britons are feeling better about their financial futures, many still worry they’re not making the best decisions. Younger people who are more likely to have clear savings targets and those closer to retirement are the most likely to feel confident.”

The least confident over their personal finances are those aged between 35 and 50 years old.

Just 42% felt comfortable with their decisions about money, compared to more than 50% for other age groups.

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