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Dudley Building Society > News > Pre-retirees underestimate cost of retirement

Pre-retirees underestimate cost of retirement

Pre-retirees underestimate cost of retirement

18th September 2018

According to a recent study from Schroders, there is a significant gap between expectations of what life in retirement will cost and the reality for retirees in the UK, which could leave many struggling.

The average non-retired person expects living expenses to account for 38% of their annual retirement income, yet those already in retirement actually spend 53% on living costs.

Furthermore, those close to retirement (aged 55+) expect they will need an income that's equivalent to 66% of their current salary to afford to live comfortably in retirement, yet those who are already retired say the average amount they actually receive from their pension is far less, at 53% of their final salary.

These figures show that people are really underestimating their basic living expenses and the level of income they will need to live comfortably in retirement. With people also living longer then they think they will, there is a need for retirement funds to stretch further.

They key is to save as much and as early as possible, to avoid circumstances where it is too late to make up a savings gap. At Dudley Building Society, we work with trusted third party financial advisors, Concept Financial Services who can help you to make sense of your current pension arrangements, as well as the actions you can take now to leave you better off for the future.

Call us now on 01384 231414 or email enquiries@dudleybuildingsociety.co.uk to arrange a free no obligation discussion with Concept Financial Services.

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