Do I need £1 million in the bank to retire?

Lamont Pridmore - Accountants

A new report by the Pensions and Lifetime Savings Association (PLSA) revealed that couples may need to save up to £1 million during their life to enjoy a “comfortable” retirement.

The Retirement Living Standards report found that for people to enjoy a consistently high standard of life, that would match expectations during a person’s working life that it could cost couples up to £45,000 a year on top of a full state pension.

For singletons, that figure is nearer £30,000, but it means that a couple would need a combined pension pot of £1 million if they do not receive the full state pension or £710,000 if they do.

They consider a comfortable life to be a weekly food budget of around £56, sufficient income to replace a car every five years, money to cover beauty treatments and three overseas holidays each year.

For those with a more moderate lifestyle, which would include the cost of owning and running a car that is replaced every 10 years and affording at least one overseas holiday a year, they predict they will need an income of £20,200 a year for singletons and £29,100 for couples. This means that couples will still need to save upwards of £500,000.

Many people leave it too late in life to plan for their retirement and early action could make the process of saving less onerous.

Most young people don’t really think about their retirement. With many struggling to even get on to the property ladder, the last thing they often consider is their life after work, and yet putting a plan in place early on in life can pay dividends.

Lamont Pridmore has helped a number of business owners and individuals prepare Life Wealth Plans using its expertise in investments and tax planning, with support from its team of award-winning specialists at Lamont Pridmore Asset & Wealth Management*.

A Life Wealth Plan could help to create a clear, long-term wealth strategy that takes into consideration life insurance, tax-efficient borrowing, maximising an ISA portfolio, tax-free investments, and looking further ahead, estate planning and the preparation of a Will.  For more advice please contact us.