Towry uses Royal Baby to promote children’s savings

Towry calculated, assuming a retirement age of 68, a newborn boy today who lived to age 100 would need a retirement fund of nearly £3m at today’s inflation rates.

As the nation celebrates the news of a royal baby, new research from Towry, shows with one in four British boys born this year expected to live to see their 100th birthday, and the state pension age currently increasing to 68 from 2046, a boy born in 2013 may have to fund some 32 years of retirement.

According to the Towry survey, the current average amount needed for Britons to maintain a comfortable standard of living during their retirement stands at £25,783.87 per year net of taxes.

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At current inflation rates of 2.7 per cent per year, Towry warned this will equate to a pension income of £161,367.87 net of taxes per year in 2081, or £186,479.97 gross of taxes - assuming the individual is a basic rate tax payer on their inflation-adjusted income.

Kate Turner, head of advice policy for Towry, said: “Most baby boys born in July 2013 may not have the same financial benefits afforded to the Prince and so parents (and even grandparents) should consider starting the savings process for their children (or grandchildren) as soon as they are able to.

“Children, and their parents, will need to have a savings culture throughout their lifetimes in order to fund both major decisions such as buying property, and their own retirements, so an early approach to financial planning should put them in a stronger financial position.”