Most Brits are set for a cash-strapped future unless they start getting to grips with how much money they will need to see them through their retirement.
A staggering 21% of UK adults believe they only need up to £50,000 ($65,705, €56,933) in their pension pot, which would give them just £3,333 per year, according to research from personal finance comparison site finder.com.
The survey further revealed that Brits, on average, believe that just £100,000 is enough to fund their retirement.
The current state pension sits at just £8,767.20 per year, with the recommended non-state pension pot between £260,000 and £445,000, depending on accommodation costs in retirement.
Millennials least prepared
The younger generation is expected to have the highest cost of living in retirement due to the rapid rise in house prices, as many millennials are expected to either still be paying a mortgage later in life or forking out on rent.
The survey found that almost a third of millennials are approximately £395,000 short in their estimation of how much they will need.
Nearly a third believe up to £50,000 will give them enough pension not live comfortably. This compares with similar thinking from 25% of gen X and 19% of baby boomers.
Baby boomers not much better
Even more concerning is the number of those across all generations working towards retirement who simply don’t know how much they need for their pension pot.
Despite all of their apparent advantages, almost half (48%) of baby boomers admitted that they didn’t know.
For non-renters, the recommended pension pot is around £260,000. Worryingly, 23% of the post-WWII generation may find themselves short by more than half, believing they only need up to £100,000 in their pension pot.
Make retirement planning a priority
Commenting on the findings, Jon Ostler, chief executive at finder.com, said: “It’s often not a priority at a younger age, but the cost of retirement for millennials is something to be prepared for, especially as a higher percentage of this generation are expected to rent in their retirement.
“It’s also concerning to learn that so many baby boomers are still yet to consider the cost of a comfortable retirement. Our study revealed that almost a quarter (24%) of this generation do not yet have a pension.”
He continued: “Despite the introduction of the automatic enrolment workplace pension a few years ago, over a third (35%) of those surveyed in our study said they still don’t have a pension. For those who do, 36% are unaware of how much they currently have in their pot, and a whopping 43% of Brits admit they don’t know how much they need to save for a pension.
“Employers must legally provide a workplace pension in the UK so it’s important that employees in the UK are aware of what they’re eligible for, as well as looking into a private pension to top up their pot.”
