UK savers drastically underestimate pension needs

UK consumers are thousands of pounds off meeting their desired pension income, a survey from Alico Wealth Management reveals.

According to Alico’s Financial Pressure Points research, respondents feel they need a retirement income of £33,070 per year, a sum which requires a woman of 65 to have saved £537,900.

Most respondents to the survey, however, think they only need to save £256,750 on average to retire comfortably.

The majority of Britons have in fact saved only £168,060 at the point of retirement. For a woman of 65, this sum would pay out just £10,908 per year: under a third of the average desired income.

Jon Sadler, head of retirement solutions at Alico, says: “Our research shows that there is a gulf of more than quarter of a million between what Brits think that they need to save for a comfortable retirement, and the reality of their situation.

“People in the UK still need to be better educated about the importance of making provision for the future.

“Getting into the habit of putting a regular amount of money into a personal pension and making sure their pensions keep working hard will go a long way towards ensuring a more comfortable retirement for people in the UK, even if the payments start off small and build up over time.”