Average 50-year-old needs to double pension pot
by Gill Montia
Story link: Average 50-year-old needs to double pension pot
The average 50-year-old Briton has less than half the retirement savings needed to guarantee a minimum standard of income when they stop work, new research from MetLife shows.
According to the life and pensions provider, the typical pension pot for this age group stands at £54,300.
However, in order to meet pensioners’ minimum annual income standards of £14,400 (including State Pension) the figure needs to be £122,800 at retirement, leaving a £68,600 gap to fill.
What is more, the gap is wider for 50-year-old women, who have an average £38,500 saved, compared with £74,200 for men.
For 26% of 50-year-olds surveyed, the picture is bleaker with less than £20,000 saved towards producing a retirement income, leaving 41% of respondents dependent on the State Pension as their main source of income in retirement.
For those in mid-life, saving for retirement is currently being squeezed by other priorities – for example, the average 50-year-old with an outstanding mortgage is five times more likely to prioritise paying off their home loan ahead of saving into a pension plan, and those with children are 20% more likely to focus on the financial well-being off their offspring.
MetLife UK managing director, Dominic Grinstead, comments: “Currently the average 50-year-old is a long way off the pension required to be financially comfortable after work.”
He adds: “As a result, retiring before 60 is highly unlikely for most.”