UK workers are failing to adequately prepare for a comfortable standard of living in retirement, according to new research published by Portafina.

A survey amongst 2,000 employed adults commissioned by the pension advice specialist revealed that more than one in four (26%) believed just £11,000 a year would be enough to sustain the lifestyle they want – £23,650 less than PLSA’s recommended comfortable retirement standard of living amount.

Portafina’s research also suggested that UK workers think the State Pension will cover 33% of their overall retirement income, but added that it might only cover just 26% of the income needed for a comfortable standard of living, for someone receiving the full amount.

According to ONS figures – which show the UK life expectancy at the age of 65 is another 20 years on average for men and women – Portafina suggested those expecting a comfortable standard of living in retirement could experience a half a million-pound shortfall.

Furthermore, if they were to solely rely on the State Pension, the research indicated that UK workers would need an additional £25,540 a year on top of the full State Pension to achieve the recommended comfortable retirement standard of living figure of £34,650.

Portafina managing director, Jamie Smith-Thompson, commented: “Knowing how much money is needed to live comfortably in retirement has understandably got Brits scratching their heads. With the State Pension age set to continue to rise, it’s more important than ever to make sure your retirement savings are geared up for the lifestyle you hope to achieve.

“You’ll need to financially bridge the gap between your chosen retirement age and when your State Pension payments kick in, and you’ll need enough money left in the pot to boost your State Pension income. Or, if you’re planning to retire once your State Pension payments kick in, this could mean working until you are 67, maybe longer.

“Whatever you choose to do in retirement and how much income you’ll need will be completely unique to you, and that’s where talking to a regulated financial adviser can help you get the most from your retirement savings.”

Share Story: