Savers told to save £800 a month for moderate retirement
UK workers need to save £799 a month into their pension to be able to achieve a moderate retirement, research has shown.
The calculations were produced by the Institute and Faculty of Actuaries – using the retirement living standards published earlier this month by the Pensions and Lifetime Savings Association - which concluded savers will need to save well above the automatic enrollment minimum contribution rate to achieve a moderate or comfortable income in retirement.
According to the IFoA, an individual aiming for a minimum income retirement target – a pension of £10,200 per year - should be saving £86 per month, on average, from the start of their working life.
This should be covered by the contribution they and their employer have to make under auto-enrollment.
However, to work towards a moderate level of income of £20,200 a year, the amount of savings required rises, with individuals needing to save £799 a month on average over their entire working life.
This represents about a quarter (26 per cent) of earnings for someone on an average full time salary, according to the IFoA.
Source: maria.espadinha@ft.com of FT Adviser