Pension savers face working for nearly a decade longer than they would have liked to, and three years beyond the current state pension age, before they can afford to retire, new research shows.
The dream age to retire in Britain is 61, according to a new survey of the over 50s, but most insist they won’t be able to stop working for eight years after this, until they turn 69.
The average amount people believe they will need for the ideal retirement is £373,000, but this is significantly more than the £218,000 which the average 50+ year old says they currently have in their pension pot, according to findings by digital wealth manager Moneyfarm.
It’s sparked a warning for pension savers to act sooner rather than later, making “small changes early” on.
The average amount people believe they will need for the ideal retirement is £373,000, the research found
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Lily Sparrow, senior investment consultant at Moneyfarm, said: “You cannot start paying into your pension pot early enough.
“There is no such thing as too soon in order to avoid this ‘retirement gap’.
“Making small changes early on in your working life is a lot easier than making huge sacrifices later on down the line when life’s financial obligations and challenges are that much greater.”
There’s also a large gender pension savings gap with research showing men over 50 currently hold £260,000 in their pension, while women over 50 have just £149,000 on average.
Regardless of the number of years they may have to make up the pot to their ideal amount, almost half over 50s (47 per cent) are unsure if they will have enough in their pension pot for what they believe will be a comfortable retirement, and 25 per cent are certain they won’t have enough for the retirement they desire.
Starting pension saving early is something over three-quarters (79 per cent) regret not doing, with most of those polled saying they kick-started opening a pension when they turned 30, but the majority only started saving seriously for retirement at 41.
Ms Sparrow added: “Paying into a pension pot isn't just a financial responsibility; it's a highly calculated investment in the life you want to lead during your golden years.
“By planning and contributing early, you're taking control of your retirement timeline, ensuring that you can retire at your desired age with the peace of mind and financial stability you deserve."
Zoe Brett, financial planner at EQ Investors, shared some top tips on maximising private pensions with GB News.
She suggested working individuals ensure they are getting the maximum matching of workplace pension contributions from their employer.
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Ms Brett said: “This gets a bit more complicated for high earners owing to tax planning but for the bulk of people this is a good way to effectively double their personal contributions.”
While retirement can feel far into the future, the expert urged people not to put off pension saving.
“If someone is 20 years away from retirement age, that’s only 240 paydays away,” she said.
Another suggestion is to invest pension assets “appropriately”.
The financial planner said: “To make the most of pension savings it is important to invest the assets in a risk-appropriate and suitably diverse portfolio of funds.
“This helps combat the effects of inflation and provides the opportunity for capital growth. A good financial planner will be able to help with this.”
