A third of people will be unable to afford their retirement, according to a new report.
Research from major pension provider Scottish Widows has estimated individual future retirement incomes and compared them with the three living standard levels set by the Pensions and Lifetime Savings Association:
| Standard | Example of standard | Required annual net income outside London | |
| Single | Couple | ||
| Minimum | No Car | £12,800 | £19,900 |
| Moderate | 3-year old car replaced every ten years | £23,300 | £34,000 |
| Comfortable | One/two cars, each replaced every five years | £37,300 | £54,500 |
If you find yourself thinking that the comfortable standard is where you would like to be:
- Even if you and your partner each have a full state pension of £10,600 a year, there would still be a net income shortfall of over £33,000 once the state pension comes into payment (at age 67 from April 2028).
- That net income figure excludes rental or mortgage costs, which are increasingly encroaching into retirement.
- Just over a third of people are on target to reach the comfortable standard, a proportion that falls to about one in five for the self-employed.
The research also showed that 35% of people are on track to fall below the minimum retirement standard. For the self-employed, the corresponding proportion is 48%, with another 25% reaching only the minimum threshold.
Working out which retirement standard – if any – that you are currently on course for is not straightforward: the launch of the government’s long promised ‘pensions dashboard’ is not due until October 2026.
For a snapshot of your future retirement, talk to us. We can review the financial information you have already supplied, allowing us to identify your potential position and discuss possible strategies.
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