Compare The Platform: How much do you need for a comfortable retirement?

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How much do you need for a comfortable retirement?

A survey by Which? found that on average retired couples need £18,000 a year to cover their household essentials such as housing, food and bills. But the figure rose to £26,000 a year when extras such as leisure activities and the annual holiday to Europe are included — the kind of comfortable retirement that most people aspire to.  

The research is based on 1,590 retired couples from a survey of 2,752 Which? members in February 2017.

However, to generate an annual income of £26,000, a retired couple would need a defined contribution pot of £210,000… on top of their state pension entitlement.  If your pot is likely to fall short, here’s what you need to put by each month to achieve it:

  • £131 a month from the age of 20
  • £198 a month from 30
  • £338 a month from 40
  • £633 a month from 50

These figures may look big, but don’t forget that you get tax relief on your contributions. If you’re a basic-rate tax-payer and contribute £80 a month to your pension, the government tops it up with a further £20 taking the total amount to £100. And if you’re a higher-rate tax-payer, your tax relief is even higher.  It’s never too early or too late to start saving for your retirement, and it’s best to save a small but regular amount than nothing at all.

Comparetheplatform’s guide to pensions can be found here and the guide to pension freedom options here.

2022-04-29T08:28:55+01:0020/04/2017|

About the Author:

Bella has 20 years’ experience in the research and analysis of the investment industry. She set up Fundscape (comparetheplatform's owner) in 2010. Before Fundscape, she worked for Thomson Reuters as Global Head of Research and Publications (Lipper) and was the author of numerous publications and reports. Bella has a master’s degree in International Business and is fluent in four languages. She is particularly fussy about grammar and punctuation, and loves going to the theatre, disco dancing and pub quizzes. @bella_caridade @fundscapeuk

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