How much are people retiring on?

It’s the question we all want the answer to - how much do we need to retire on? But a recent report suggests that two in three retirees will run out of money.

Two-thirds (66%) of those retiring in 2021 will exhaust their pension savings before they die, according to research by Standard Life Aberdeen.

The Class of 2021 looks at 2,000 UK adults who were either due to retire in the next 12 months, or had retired in the past 12 months and found a number of interesting stats.

Lockdown and worries over the pandemic and job security have persuaded more people to accelerate their retirement plans, which may leave them short of funds. The survey found that more than a third (37%) of those close to retirement have chosen to leave their job early. 

Although they plan to spend less a year in retirement than they currently do (on average £21,000 against £29,000 respectively) a lack of savings has been identified as problem.

Based on this £21,000 figure, a retiree would need savings of around £390,000 on top of their state pension for a 30-year retirement.

But the average pension pot for the Class of 2021 is £366,000 with a third (33%) admitting to having less than £100,000 saved away.

Women who are close to retirement were less likely to feel confident they are financially ready to finish working than men. The report found a third (34%) of women were feeling very confident financially about finishing work against two in five (43%) men.

The pandemic’s acceleration of retirement plans is certainly a reminder that it’s vital to build flexibility into retirement planning. The survey is also a reminder that most people aren’t saving enough.

If you’d like to find out how well you’re doing towards saving for retirement, please contact me