It turns out there is a reason for people in their thirties and upwards to double down on the amount of effort they’re making on their efforts to save: retirees today, or people close to retirement age, are facing the reality that they need to save double the amounts they would have 15 years ago to achieve the same standard of living in retirement.

New research from Royal London compares how much individuals and couples should be saving in todays uncertain economic climate to produce a total income of two thirds of the average salary, which stands in the UK at present at roughly £17,800 a year. The study makes a few assumptions along the way, chiefly that workers will qualify for the full new state pension, worth £8,500 a year – however this may not be the case for everyone, so some people will in fact have to save even more to compensate.

There is a combination of factors influencing this. Firstly, the increased gig economy has meant that more workers than ever before are self-employed and are saving less for their retirement than their employed counterparts. Cost of living has continued to rise, even though the housing market has stagnated; and increasing uncertainty over Brexit has caused the economy to slow down and a tendency for all predictions to ‘err on the side of caution’ while this issue of whether we’re in or out, with a deal or no deal, is resolved.

There’s also a warning in an associated Royal London report, that we may face another type of crisis as people move into retirement without owning their own homes, as more and more people are still renting and either have been unable or unwilling to buy their own homes. 

In the case of renters in retirement, the report goes on to estimate how much more retired renters would need to save to live comfortably and it’s quite an eye watering figure of £185,000 total more savings needed than homeowners, or to save £445,000 in total towards their retirement years.

If people are struggling to save to buy their own home during their working life, it is difficult to see how they would be able to save for their retirement and reading the above reports makes it clear there’s an increasing wealth gap in the country at present.

In fact, The Equality Trust lists the UK as having ‘a very high level of income inequality compared to other developed countries’(Source). This report, when read alongside the other reports cited in this article, makes for very sobering reading for anyone interested in the economic future of the UK. According to The Equality Trust, the majority of households in the UK have disposable income at a lower level than the mean UK wide income. This is a clear influencing factor in people having enough money to save to firstly buy a house and secondly to sufficiently prepare for their retirement.

Is it harder to retire in the UK?

The UK still has a very high standard of living, some great places to visit and the NHS – but, low state pension levels compared to other European countries, a stagnant economy which means you’re not getting a lot of interest paid on savings in the UK at present, and so you have to weigh up the advantages and disadvantages of where you retire now. If you’re considering retiring as a UK citizen within the EU, do check your rights in the event of us falling out of the EU as the ongoing Brexit saga draws to some sort of conclusion.

Otherwise, as all these articles indicate, the most comfortable retirees in the UK are those that have been able to independently save the most for their retirement. So plan early, get saving, and consult a financial advisor – it’s never too early, nor too late to take advice, just make sure you don’t avoid the topic altogether!


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Seventy Financial Planning
The Apple Store, Haggs Farm,
Haggs Road, Follifoot, Harrogate,

01423 611004

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