Consumer group Which? has announced that £305,000 is the target amount for pensioners with an annuity to enjoy a ‘comfortable’ retirement. This equates to £19,000 per year for a one-person household and £26,000 for a two-person household.
These figures include the average state pension payout of £8,060, so single savers would have to ensure a personal pension could provide £12,548 per year to get their annual pension payment to £19,000 after tax.
If your target is to have an ‘essential’ lifestyle, the same report suggests the figures can reduce to £13,000 and £18,000 per year for single-person and two-person households respectively.
Thinking of a ‘luxury’ lifestyle for your retirement? In that case, you’d need to target £31,000 and £41,000 per year for single pensioners and couples respectively.
For retirees who opt to get their pension from an income drawdown, the numbers look better. A couple looking to get £26,000 a year would only need to save £154,700 if they opted for income drawdown, compared to £265,420 if they got an annuity.
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Similarly, if you don’t know what your projected retirement income looks like, we’d advise you to speak to a financial advisor as quickly as possible. There are significant benefits from having your money working for you for as long as possible for the maximum return. Leave it too late to start preparing, and you may not be able to achieve the level that you’d like.
If you don’t have a financial advisor that you can speak to, and would like us to make an introduction from within our network, please get in touch.
See more from the Which? figures here.