PensionsJan 13 2023

Pension pot of £645k needed for comfortable retirement lifestyle

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Pension pot of £645k needed for comfortable retirement lifestyle
Pexels/Maitree Rimthong

“This is due to soaring house prices meaning that many struggle to find the money to buy a house or are forced to takeout marathon mortgages with terms that stretch into their 70s to achieve lower monthly mortgage payments.”

Speaking to FTAdviser today, a spokesperson for PLSA said using different assumptions, it has arrived at slightly lower projected pot sizes.

The first table below is for individuals and the second is the amount each person will need to accumulate in a couple.

Source: PLSA

Greer added: “The PLSA’s figures also do not account for the potential costs of requiring social care. According to the ONS, male healthy life is around 62.8 years and for women it is 63.6. 

“Meanwhile life expectancy was 79.0 years for males and 82.9 years for females meaning that many people will spend a significant proportion of their retirement in ill health potentially needing to access costly care.”

Elsewhere, a DWP spokesperson said automatic enrolment has succeeded in transforming pension saving, with more than 10.8mn workers enrolled into a workplace pension to date and an additional £33bn saved in real terms in 2021 compared to 2012. 

“Our ambition for the future of automatic enrolment will enable people to save more and to start saving earlier,” it said. 

“However, we also recognise current concerns with rising prices and are committed to ensuring people have the support and information they need to make informed choices about their financial futures, with free and impartial guidance available via Pension Wise and Money Helper.”

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