The true cost of retirement unveiled as only 36% of pension savers on track for moderate income
Time is running out for millions of people to secure a comfortable retirement. With only 36 per cent of pension savers on track to achieve a moderate income in retirement, the reality is that the majority are falling short of their financial goals.Most people are underestimating how much they need to save for retirement, a recent survey from Hargreaves Lansdown has shown. The findings show that a large portion of the population is not preparing adequately, leaving them vulnerable to a future of financial uncertainty.Helen Morrissey, Head of Retirement Analysis at Hargreaves Lansdown, said: "It's alarming to see that so many people aren’t saving enough for retirement. While some individuals are putting away what they need, the majority aren’t making sufficient contributions, and many will find themselves struggling in their later years."The survey reveals that many people are unsure about when they'll be able to retire. While 50 per cent believe they'll retire between the ages of 61 and 70, 16 per cent hope to retire before 60, and 14 per cent plan to work into their 70s.She said: "This uncertainty is a sign that retirement plans are still a long way off for most people."People are either relying too much on the state pension or hoping they can continue working later than they expected."The issue is worsened by the fact that many people fail to account for the true expenses of retirement. A lot of people don't realise how much they’ll need to cover living costs in retirement, particularly with inflation and healthcare expenses on the rise. Without adequate savings, many may have to rely on the state pension or continue working longer than they had planned.The good news is that it’s not too late to change course. Experts stress the importance of early and consistent planning. Morrisey added: "Even small increases in pension contributions now can make a significant difference over time. If you receive a pay rise or change jobs, that’s a great opportunity to increase your savings."The Pensions and Lifetime Savings Association (PLSA) has outlined the income needed for a comfortable retirement in 2025 through its Retirement Living Standards (RLS). According to the PLSA, a single person will require £43,100 annually to achieve a comfortable retirement, while couples will need £59,000. LATEST DEVELOPMENTS:State pension age increase set to reward Rachel Reeves's Treasury with £10.4bn savings boonPensioners urged to get 'mid-retirement MOT' as private savings may not be enoughState pensioners could be eligible for £80 a week payment boost by making 'five minute call' to DWPThese figures cover a lifestyle that includes regular holidays, dining out, and various leisure activities, but they do not account for housing costs, which can significantly impact the overall amount needed. A single person would need an annual income of £31,300, and a couple would need £43,100 to meet a moderate income level. This income supports regular holidays, dining out a few times a month, and other discretionary spending, but it does not account for housing costs, which would need to be added to these figures if a mortgage or rent is involved. The PLSA’s standards also include lower thresholds for minimum retirement lifestyles, with the minimum income required for a single person being £14,400 and for a couple, £22,400. These standards provide benchmarks to help individuals plan for retirement based on their desired lifestyle.While many people are off track for a comfortable retirement, there are steps to improve their financial situation. Morrissey said: "Review your pension regularly and take advantage of employer contributions. Using pension calculators can help you monitor your progress."Retirement is about more than stopping work – it’s about living the life you’ve worked for. She continued: "Retire with the freedom to enjoy your time, but that requires a secure financial base. Understanding the true cost of retirement and planning for it is crucial."Those on track for a moderate income are better positioned, but for the rest, taking action now can make a big difference.Morrissey concluded: "It’s never too late to start saving. The sooner you take control of your retirement plan, the more comfortable your future will be."
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Time is running out for millions of people to secure a comfortable retirement.
With only 36 per cent of pension savers on track to achieve a moderate income in retirement, the reality is that the majority are falling short of their financial goals.
Most people are underestimating how much they need to save for retirement, a recent survey from Hargreaves Lansdown has shown. The findings show that a large portion of the population is not preparing adequately, leaving them vulnerable to a future of financial uncertainty.
Helen Morrissey, Head of Retirement Analysis at Hargreaves Lansdown, said: "It's alarming to see that so many people aren’t saving enough for retirement. While some individuals are putting away what they need, the majority aren’t making sufficient contributions, and many will find themselves struggling in their later years."
The survey reveals that many people are unsure about when they'll be able to retire. While 50 per cent believe they'll retire between the ages of 61 and 70, 16 per cent hope to retire before 60, and 14 per cent plan to work into their 70s.
She said: "This uncertainty is a sign that retirement plans are still a long way off for most people.
"People are either relying too much on the state pension or hoping they can continue working later than they expected."
The issue is worsened by the fact that many people fail to account for the true expenses of retirement. A lot of people don't realise how much they’ll need to cover living costs in retirement, particularly with inflation and healthcare expenses on the rise. Without adequate savings, many may have to rely on the state pension or continue working longer than they had planned.
The good news is that it’s not too late to change course. Experts stress the importance of early and consistent planning. Morrisey added: "Even small increases in pension contributions now can make a significant difference over time. If you receive a pay rise or change jobs, that’s a great opportunity to increase your savings."
The Pensions and Lifetime Savings Association (PLSA) has outlined the income needed for a comfortable retirement in 2025 through its Retirement Living Standards (RLS).
According to the PLSA, a single person will require £43,100 annually to achieve a comfortable retirement, while couples will need £59,000.
LATEST DEVELOPMENTS:
- State pension age increase set to reward Rachel Reeves's Treasury with £10.4bn savings boon
- Pensioners urged to get 'mid-retirement MOT' as private savings may not be enough
- State pensioners could be eligible for £80 a week payment boost by making 'five minute call' to DWP
These figures cover a lifestyle that includes regular holidays, dining out, and various leisure activities, but they do not account for housing costs, which can significantly impact the overall amount needed.
A single person would need an annual income of £31,300, and a couple would need £43,100 to meet a moderate income level. This income supports regular holidays, dining out a few times a month, and other discretionary spending, but it does not account for housing costs, which would need to be added to these figures if a mortgage or rent is involved.
The PLSA’s standards also include lower thresholds for minimum retirement lifestyles, with the minimum income required for a single person being £14,400 and for a couple, £22,400.
These standards provide benchmarks to help individuals plan for retirement based on their desired lifestyle.
While many people are off track for a comfortable retirement, there are steps to improve their financial situation.
Morrissey said: "Review your pension regularly and take advantage of employer contributions. Using pension calculators can help you monitor your progress."
Retirement is about more than stopping work – it’s about living the life you’ve worked for.
She continued: "Retire with the freedom to enjoy your time, but that requires a secure financial base. Understanding the true cost of retirement and planning for it is crucial."
Those on track for a moderate income are better positioned, but for the rest, taking action now can make a big difference.
Morrissey concluded: "It’s never too late to start saving. The sooner you take control of your retirement plan, the more comfortable your future will be."
