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Majority of working people won’t be able to maintain current lifestyle in retirement

Pensions and insurance provider Aegon has calculated that the average wage-earner will need a combined pension pot of over £300k to maintain their pre-retirement lifestyle.

Based on findings from the Government’s auto-enrolment review, an individual earning £27,000 a year should be aiming for a yearly retirement total of two-thirds of that amount, or £18,000 a year. This would require them to find another £809 on top of their state pension, either from private or workplace pensions.

The report suggests that people earning £56,000 a year should target an annual post-retirement income of £28,000, or 50% of current earnings. This example would require the individual to find another £1,642 a month to reach the target.

The auto-enrolment review concluded that, based on these numbers, there are approximately 12 million people in the UK who are not saving enough to meet those targets.

Aegon Pensions Director, Steve Cameron, said: “While auto-enrolment is helping to plug the pensions gap, many of us face a shortfall that won’t just go away on its own. The earlier you take steps to put a bit more aside, the better.”

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