12th December 2013
Hundreds of thousands of Britons are set to be left wanting when they finish work for good as the price tag for a ‘happy’ retirement is now more than £225,000.
According to new research from pension specialist LV=, Britons need £225,756 over the course of an average 17-year retirement in order to live the lifestyle they desire – and that assumes they do not need additional capital to move to their ideal retirement location.
After conducting a survey of 1,070 adults aged 60-65 years, researchers from LV= set about compiling the definitive ‘blueprint’ for a happy retirement, drawing in the ideal property to holidays abroad, family time and everything in between. Some of the primary aspirations include:
However 8% of 60 to 65s admit they have no form of pension or retirement funds in place whatsoever, meaning an estimated 315,200 people will be relying on nothing but the state pension of £110.15 per week, or £5,727.80 a year in retirement.
With a happy retirement costing at least £10,820 per year or £208.08 per week, this group of people will find themselves falling short in their pursuit of happiness by £5,092 in their first year and £106,243 over the course of their retirement.
Of those 60-65s who do have a pension, over a quarter, at 27% do not know the value of their current pension pot and industry figures show that almost third at 30% of people have a pension pot of less than £10,000. However, given that half, at 49%, of those who are still to retire have not sought any form of financial advice, the true shortfall in their pension will not become apparent until they are ready to retire.
READ MORE: What you need to save to retire in comfort
Commenting on the findings, Vanessa Owen, LV= head of annuities and equity release, says: “It is clear from the research that Britain has fairly modest aspirations when it comes to what they feel they need for a happy retirement. And indeed many of the features of a happy retirement, such as time with family and friends, cost no money at all.”
“However, one cannot shy away from the fact that achieving contentment in retirement, as with any lifestyle, does come with a price tag; over two hundred thousand pounds according to the research. It is never too late to make a difference, but it is important that people plan for the retirement as soon as possible and also explore all of the options available to them as retirement approaches, so they can maximise their income once their working lives come to an end.”