How much should you have already saved for your retirement?
Millions of employees work tirelessly for decades in the expectation of a comfortable retirement in the future. But for many UK residents retirement is an event to be feared due to lack of savings and pension.
To help you understand how much is needed for retirement we at Blacktower Financial Management have revealed how much you need to save, and top tips on how to save efficiently.
If you plan on living out your retirement years without worrying about finances, retirement saving is a must.
Do you know how much you need to have saved in order to live comfortably?
Generation X needs to save £375,676 by the time they retire to have an income of £26,834 a year. Nationwide, this amount would be enough money to live comfortably.
Check your age against the amount you need to have currently saved to find out if you’re on track.
WHICH AREAS SAVE THE MOST?
The cities with the largest percentage of people who have saved the £375,000 needed for their retirement:
- London 14%
- Southampton 12%
- Edinburgh 11%
Cities with the smallest percentage of people who have saved the £375,000 needed for their retirement:
- Norwich 1%
- Belfast 2%
- Newcastle 3%
WHICH AREAS SAVE NOTHING?
Cities with the largest percentage of people who saved nothing towards their retirement:
- Belfast 49%
- Cardiff 45%
- Leeds 43%
Cities with the smallest percentage of people who saved nothing towards their pensions:
- London 25%
- Norwich 28%
- Edinburgh 28%
How to save for your retirement
We have revealed top tips on how to save efficiently for your retirement:
- Create a budget and follow it
The best way to plan a budget in order to save is knowing how much you can spend weekly. Check out our recent post on how to review your finances here
- Pay off your mortgage
Your home contributes significantly to your fixed expenses. By paying off your mortgage you can finally live there ‘rent-free’, this eliminates a large monthly spend.
- Talk to your spouse or significant other about savings
Be open with your partner about your finances, and about how you should both be saving and will spend in retirement. It’s always helpful to chat openly about finances and avoids any awkward discussions later down the line.
- Prioritise your pension
If you concentrate for saving for your pension rather than saving short term this will help yourself long term.
UK long-term inflation rate - https://tradingeconomics.com/united-kingdom/inflation-cpi
To calculate the results, Blacktower predicted that a person would need 75% of their starting salary per year, in retirement. The subsequent data is based on:
- The UK national salary of £29,009
- Workplace minimum contribution of 8%
- UK long term inflation rate of 2.5%
The results show the amount needed if you do and do not pay into a workplace pension scheme.
UK national retirement age - https://www.gov.uk/state-pension-age
UK national workplace pension contribution – https://www.thepensionsregulator.gov.uk/en/employers/managing-a-scheme/contributions-and-funding