Not So Ordinary Accountants

Savers 'dangerously underestimating' minimum cost of retirement

10 Jun 2024

Research carried out by pension provider Pension Bee has suggested that UK savers are 'dangerously underestimating' the minimum amount needed to retire.

A survey of 1,000 savers carried out by Pension Bee showed that 23% were unsure of the total pension pot size needed to achieve the retirement income they desire.

Pension Bee said that, according to the Pensions and Lifetime Savings Association's (PLSA) Retirement Living Standards, a pension pot of £150,000 would only fund an individual's minimum retirement standard for ten years. Pension Bee suggested that working-age adults could be underestimating the true cost of retirement.

49% of those polled estimated that they would require a pension pot of around £250,000 or more. However, Pension Bee found that, generally, the survey showed that there was a lack of clear consensus in regard to desired annual income in retirement.

Becky O'Connor, Director of Public Affairs at Pension Bee, said: 'It's hard to plan for retirement without an idea of how much you might need, yet most Brits seem to be unaware of - or worse, dangerously underestimate - the true cost of retirement.

'A good pension pot is one that can provide enough money for the duration of retirement. As this exact amount will vary based on individual circumstances, pension calculators can be a helpful tool in setting financial goals and adjusting behaviours to achieve them.'