More than a quarter of UK adults don’t know how much retirement income they’ll need

More than one in four (28 per cent) UK adults are unsure about how much income they would need in retirement, research from Scottish Widows has found.

Meanwhile, one in five (21 per cent) of those aged 50 and over said they had still not worked out how much income they would need when they retired.

The research found that just over £29,000 was the average annual household income people believed they would need for a comfortable retirement.

However, when tracking this against Scottish Widows’ national retirement forecast, it suggested that just under half (43 per cent) of people would be on track to have this income in retirement.

The report also suggested that just over a third (34 per cent) of people thought that they are adequately preparing for retirement, increasing to 40 per cent among those aged 60-64.

When it came to savers who are approaching retirement, 54 per cent expected to retire after they would like to.

Meanwhile, 64 per cent of those approaching retirement were worried that they will run out of money in retirement, compared to 38 per cent of today’s retirees who thought the same.

Scottish Widows said that there is a clear need for greater engagement among those approaching retirement, as half of people in their 50s and early 60s had still not researched how much they might need to save for retirement.

In addition to this, more than four in 10 (43 per cent) future retirees expected the state pension to provide a modest or significant part of their retirement income, as it forms a significant proportion of income for 46 per cent of people.

Given this, Scottish Widows said that it is not surprising that 45 per cent of those polled are concerned about changes to the state pension, with more than one in 10 (12 per cent) of future retirees not expecting it to be around when they retire.

Commenting on the research, Scottish Widows head of pension policy, Peter Glancy, said: “Expectation versus reality when it comes to retirement income shows how vital it is to help people, especially those on the verge of retirement, build a clearer picture of what their own lives could look like when they stop working, and what they can do now to achieve the best outcomes.”

Our post on How To Prepare For Retirement provides some insight into what to consider when planning for your retirement, such as your lifestyle and planned expenditure.

Alternatively, if you would like to speak to a financial planner about planning your retirement income, feel free to give us a call on 0191 384 1008, or email us at enquiries@wealthofadvice.co.uk.

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