According to our latest investigation, those looking for a comfortable retirement should be saving £131 a month from the age of 20, and as much as £633 a month if you leave retirement saving until your 50th birthday. So how are your retirement savings shaping up?
For me, retirement seems a long way off. It’ll be at least 30 years (probably more like 35) before I finally hang up my work boots. I find it pretty hard to imagine what my life’s going to be like next year, let alone what 2050 will have in store for me.
The million dollar question is: how much money am I going to need when I retire? And therefore, how much do I need to be saving now?
Saving for retirement
Fortunately, a million dollars isn’t the answer – a survey of Which? members suggests that a couple will need around £26,000 a year for a comfortable retirement, which in today’s money means they’d need a combined pension pot of £210,000, alongside their state pension entitlement.
We found that retired couples needed at least £18,000 to cover the essentials such as, food, utilities, transport and housing costs. This figure rises to £26,000 to cover extras like European holidays and leisure activities.
Assuming I’d saved nothing at all so far, what this investigation has revealed is that I need to be piling a few hundred pounds into my pension every month.
My pension pot isn’t totally empty. Happily, I heeded my dad’s advice when I got my first job and joined the company’s pension scheme. I’ve since moved on from that job and I’ve now got three different pension pots. In my head, I’m thinking I’m well set.
But, could I tell you how much I’ve got saved in them right now? Could I tell you how much I currently pay into my pension each month? I could probably go through some paperwork and find out, but the answer to both is ‘not enough’.
While I’m sure many of you will be on top of your finances, I’m probably not alone in neglecting to appreciate the value of my pensions’ savings. After all, most people under the age of 35 don’t see pension planning as a priority. In general, we all tend to value the present over the future, spending money on pressing events today rather than saving for tomorrow.
Which is why I’m eagerly awaiting the new pensions dashboard. We’ve covered this before – the online dashboard will show all your pensions data in one place – and many of you agree that this is a great idea to help us all plan for the future.
Last week, the first prototype was unveiled and now work starts on making a consumer-facing version that can be used by 2019.
Personally, I’d like the dashboard to reflect how much I’ve saved so far, what it’ll be worth, and a personalised indication of how much more I’d need to save each month to meet my own goals for retirement.
Over the coming months, the different functions and potential uses for a dashboard will be discussed, and we want to make sure it meets the needs and expectations of the people it’s supposed to help.
So, what would you want to see in an online pension dashboard, and how would you use it?