Most workers are not saving enough to finance the retirement they dream of, says a new survey.
Research by wealth firm Towry revealed that adults are looking for a retirement income of £25,783 a year.
To achieve that annual income at current rates, their pension pot would have to top at least £616,000 to let them to retire at 65.
However, the research showed that only 27% of savers aged over 55 say they will have enough put aside for a comfortable retirement.
They add that 7% of workers say they will have to work for longer in a bid to build up their pension pots.
Expert financial advice
Kate Turner, a wealth adviser at Towry, said that most people should take expert financial advice to ensure they are on course for reaching their goal of living in a comfortable retirement.
She adds that even those who believe they will have enough should take advice from a pension expert to make sure.
Kate said: “Many people who believe they are saving enough to maintain their current lifestyle when they retire may need to commit more of their income to their pension pot.”
One of the biggest issues, she says, is that many people are unaware of the ‘sheer scale’ of how the amount the really need to put away to achieve their ambition because of the affect of today’s low interest rates.
No retirement savings
The clock is running down for many people but for those over 55, urgent action may be required to get their pension pot up to a level that will fund their retirement at comfortable levels – particularly if the retiree is expecting to live to an old age.
Towry says it is a difficult task to build up a pension pot of that size because of everyday outgoings such as buying property, raising children and paying bills and their figures don’t include any additional income a person may receive from a state pension.
The firm points out too that its figure of £25,783 is a net amount and the gross yearly income a pensioner would need to achieve that is £33,777 for a non-smoking male looking to retire at 65.
The lack of preparedness by savers is also backed up by a recent Prudential survey which reveals that one in seven people will have no retirement savings at all and will be reliant on the state pension.
For many retired people, the state pension will provide more than a third of their income, although for women the figure is higher at 43%.