The average annual income in a retired British home edged up to £28,600 this year, enough to provide for a comfortable pension.
The joint retirement income for two adults lifted 1.2% in the 2018- 2019 tax year, compared to the previous year, according to research gathered by LearnBonds. Last year’s retirement income for two adults was just under £28,880, said the Office for National Statistics.
This level of income, just over £2,380 a month takes care of a retired couple’s basic spending, as well as some luxuries, such as European holidays, hobbies and eating out. This standard of living will demand a pension pot of around £300,000.
Those that want a more affluent lifestyle that includes long-haul trips and a new car every five years, will need a £42,000 income, with a pension pot weighing in at £695,000.
Investment manager Fidelity said that savers should set aside “at least 13% of their pre-retirement annual income before tax, each year, from the age of 25.”
Experts say workers should view their pension as a series of building blocks. First, the state pension. Second, a private or workplace pension. And finally, further market investments, an Individual Savings Allowance (ISA), or property.
LearnBonds news editor Roger Baird said, “Dealing with pensions is like scrubbing the bathroom, no one likes it, but it’s important to get the job done. This data sets a useful yardstick, letting you know what saving levels to aim for throughout your working life.”