How Much do You Need to Save?
April 23rd, 2015
How much do you need to save to have the retirement income you need? assuming you get the new flat-rate pension of £8,100 a year – which rise’s in line with inflation or earnings. Someone earning £50,000 a year is likely to need a retirement income of £30,000 a year, of which the OAP will provide £8,000. So they need to save enough to generate £22,000 a year – today that would require a sum of £547,500. And to reach that sum, you would need to save about 20% of your earnings every year of your working life.
Very few people are saving enough out of income to meet their retirement needs. But the tax advantages of pension plans have never been better, so topping up contributions should be a priority for most employees