Savers aged 20 need to put away £131 every month into a defined contribution (DC) pension to achieve a £26,000 annual income in retirement, research from Which? has said.
The figure rises to £198 for 30-year-olds, £338 for 40-year-olds, and £633 for 50-year-olds, and assumes 20% tax relief, 3% investment growth, and a state pension top-up. Saving this amount would help a retirement fund total about £370,000 after tax that could then be used to buy an index-linked joint life annuity. The research suggested a £18,000 annual income in retirement would cover household essentials, while a £26,000 income would allow spending on short-haul holidays and some leisure activities. The calculations are based on a survey of 1,590 retired couples' spending habits...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
