Setting a target
Find useful information on planning for retirement, setting your targets and other benefits you may receive when you retire.
How much will you need?
Many people don't save enough for retirement. This is for several reasons:
- Affordability – it can be hard to prioritise your pension over other day-to-day costs, especially when costs (such as housing and food) are high.
- Planning – it's difficult to know exactly how much money you'll need when you stop working.
- Education – you may have gaps in your knowledge about pensions and finances.
Set your target
You can use the Pensions and Lifetime Savings Association's (PLSA) Retirement Living Standards to work out how much money you'll need in retirement, and how much you need to save now to reach that target. This should help you reach your desired level of financial security, flexibility and freedom once you retire.
As part of these Retirement Living Standards, the PLSA has outlined the income you'll need in order to achieve three potential standards of living*.
Minimum
£14,400
£22,400
Moderate
£31,300
£43,100
Comfortable
£43,100
£59,000
These amounts would fund this lifestyle for people living outside London.
These figures don't include housing costs, and will change in future as the cost of living increases. Deductions have also been made for Income Tax – you can check this for the current tax year and see what the government allows people to earn before they start paying Income Tax.
To find out more about the standards and the goods and services you'd be able to afford go to the PLSA website.
Your other income
You should consider other possible income sources apart from the Scheme when you review your retirement income. These should include the State Pension, benefits from any previous or future employers. This way you'll be able to decide whether you're on track for the retirement you want, or whether you need to save more.