Do savers need £1 million in the bank to retire?

We believe more planning is needed. In 2019, a report by the Pensions and Lifetime Savings Association (PLSA) disclosed that couples may need to save up to £1 million during their life to enjoy a “comfortable” retirement.

According to the Retirement Living Standards report, to maintain a consistently high standard of life that matches expectations during a person’s working years, couples may need up to £45,000 a year on top of a full state pension. For singles, the figure is closer to £30,000. This implies that a couple would need a combined pension pot of £1 million if they don’t receive the full state pension, or £710,000 if they do.

A comfortable life includes a weekly food budget of about £56, enough income to replace a car every five years, money for beauty treatments, and three overseas holidays each year. A more moderate lifestyle, which would involve the cost of owning and running a car that is replaced every 10 years and affording at least one overseas holiday a year, requires an income of £20,200 a year for singles and £29,100 for couples. In this case, couples would still need to save over £500,000.

Many people don’t plan for retirement early enough, which could make saving less burdensome. Young people often struggle to get on the property ladder and may not consider life after work. However, early planning can be beneficial.

At Lamont Pridmore, we have assisted numerous business owners and individuals in preparing Life Wealth Plans, using our investment and tax planning expertise and the support of our award-winning specialists at Lamont Pridmore Asset & Wealth Management.

A Life Wealth Plan can help create a clear, long-term wealth strategy that considers life insurance, tax-efficient borrowing, maximising an ISA portfolio, tax-free investments, estate planning, and preparing a will.

With the state pension age continuously rising, individuals need to think seriously about their plans for their 60s and 70s to take necessary actions to achieve their goals. Professional help may seem expensive, but it could significantly increase a person’s chances of retiring with enough means to support themselves and live comfortably.

To create your Life Wealth Plan, please contact our dedicated team of Independent Financial Advisors at Lamont Pridmore Asset & Wealth Management.