UK and Japanese savers need to put aside less of their household income for their retirement than other parts of the globe, Fidelity International has revealed.
According to the company’s global retirement savings guidelines, people in the UK and Japanese need to save seven times their annual household income by the time they reach age 68, to maintain the lifestyle they had pre-retirement.
In the US, Germany and Canada it jumps to 10 times their household income, while in Hong Kong it is 12 times to achieve the same result.
Fidelity’s guidelines can be accessed via an interactive tool and answer the most frequent questions by retirees, namely: ‘How much do I need to save for retirement?’ and ‘Am I on track to save enough?’.
The savings calculation is based on age and salary, providing suggestions on how much to save and what savings milestone (multiple of annual household income that should have been saved by what age) they should reach.
Onus on the individual
“While UK savers need to save less than other countries, there is still a lot more that could be done to educate and prepare the population to save for their retirement,” said Maike Currie, investment director at Fidelity International.
“Auto-enrolment has had a real impact, with 73% of employees [according to the Office for National Statistics] now contributing to a UK pension, and employers have a significant role to play in engaging their workforce. However, the onus is still on individuals to make sure they’re saving enough.
“This is why we have developed these simple rules of thumb to help people to achieve their long-term savings goals with a little bit of financial forward planning. Missing a milestone is not the end of the world, and can be overcome through planning and saving – the best first step is to start.”
Source: Fidelity Retirement Savings Guidelines, October 2018
