How Much Have You Saved For Retirement?

One in four over 50s have no idea how much their pension funds or worth or how much cash they have to see them through retirement, according to new research.

Despite publicity surrounding new pension freedoms introduced in April 2015, the message seems to have gone unnoticed by thousands of retirement savers.

The study by financial services firm Retirement Advantage revealed that most people guess they have around £110,000 stashed in their pension funds, while 22% reckon they have less than £50,000 and 12% estimate they have between the two figures.

However, figures from pension providers put the size of the average pension pot at around £38,000, which suggests many retirement savers are overestimating the money they have saved.

Men seem to have a better idea of how much they have saved for retirement – with only a fifth confessing they did not know, compared to almost a third of women.

Pension freedoms

The new pension freedoms were designed to give retirement savers more control over their pension cash and how they spend it.

Retirement Advantage argues that retirement savers have a greater responsibility to manage their finances and to make sure they have enough saved for when they give up work.

Spokesman Andrew Tully suggests that know how much pension cash they have saved should contact their provider for a statement.

“No one can plan their retirement if they do not have a precise idea of how much money they have and what they might need,” he said.

“The government has made clear that people are responsible for their own retirement finances now and will not get any extra help from the state if the blow their money or do not save enough.

Spending choices

“The choices workers and savers make about their spending in the years approaching their retirement will have a massive impact on their lifestyle once they have given up work.”

Tully also explained that retirement savers need a plan and financial goals so they know that they are on track for the retirement they want.

“It’s basic budgeting,” he said. “Don’t spend what you can’t afford, don’t put all your eggs in one financial basket and have some idea of the money you will need to spend every month once you have retired,” he said.