According to research by a Network, one in four people believe that they can live almost thirty per cent below the minimum wage in retirement. The analysis of the findings from the report shows that people's expectations about the size of the pension pot that they will need is greatly short of the mark.
The survey revealed that twenty seven per cent of people believe that a retirement fund of up to £100,000 would mean a realistic pension in the future, meaning that most people would live off an annual income of around £7000. On average, £187,000 is what most people believe is the ideal amount in a fund, but this would still only provide an annual income of around £13,500, which is 40% below the average national wage. The firm believe that a pension fund of around £300,000 is needed to provide a comfortable, but not extravagant life in retirement.
Our view
As ever, people need better financial education to enable remedial action before it is too late.