Triggered by recent comments from the Office of National Statistics which claim the average UK retired household spending power is currently £21,770 per year, the BBC decided to ask the question: what would somebody need to save in order to achieve a £21,000 pension in retirement, theoretically enabling themselves to continue living at the standard to which they’re accustomed. The answer, unfortunately, might upset some people.


Yes, you read that right. If someone were to start saving for a pension at the age of 35, they’ll need to be able to put away a whopping £404 per month to meet that desirable £20,000 pension level.

Of course, this is all just a model. The set retirement age may be due to change again in the future, and many people have other savings or assets (such as a house or partner’s pension) to rely on also in their old age. The report also clearly states that: “assuming [the pension pot] achieves investment growth of a typical default investment strategy, and assuming the eventual payout increases annually with inflation, as well as granting a 50% income to a surviving partner, this level of saving has a 50/50 chance of providing an annual income of £20,000 or more.”

From our point of view it really highlights two important facts: firstly that, yes, it is important to start pension savings as early as possible; but also that everyone’s real-world situation is different. The pensions market can be something of a minefield, with different policies and differing levels of risk on offer.

Our advice would always be this: seek help. An expert in pensions and annuities will be able to give you valuable guidance from the day you start saving your pension to the day you start enjoying it and beyond. Only by seeking that expert advice will you know you’re making the most of your money and be sure that your retirement is every bit as pleasurable as you hope it will be.