Less than 40% on track for 'moderate income' retirement

Only 39% of pension savers are on track for a moderate retirement income of £23,300 a year. This is a fall from 42% six months ago, according to the latest HL Savings and Resilience Barometer. The highest earners are also struggling. Only 30% of the highest earners are on track for a comfortable retirement, down from 32% six months ago. Two thirds of the highest earners are on track for a moderate retirement but this is unlikely to meet their needs, according to Hargreaves Lansdown. Only 15% of households are on track for a comfortable retirement income. One of the reasons why many are slipping back is that rapidly rising inflation means the amount required for retirement has risen but pension values have not kept up. The Pensions and Lifetime Savings Association’s Retirement Income Standards suggest the amount needed to qualify for a moderate retirement has risen from £20,800 per year to £23,300 over the past year. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “The cost-of-living crisis has hollowed out our finances and it is fair enough that people have prioritised keeping themselves afloat in the here and now rather than stressing about retirement. Many people will have time to rebuild their retirement planning when things improve. “Older workers on the other hand have far less time and we could see more choosing to stay in work for longer to try and make up ground. Recent government jobs figures showed signs of people who had previously retired choosing to go back to work and we will likely see this trend increase.” Separate research from pensions provider Standard Life has revealed that the required pension savings to meet the PLSA’s moderate retirement income standard is now around £285,000, even with a full State Pension. For a comfortable living standard in retirement, pensioners would need to amass a pot of around £530,000.

Less than 40% on track for 'moderate income' retirement

Related items

News from Twitter