Pensioners are more concerned about not having to worry about money or a fall in living standards than how much cash they need for a comfortable retirement, according to new research.
A decent take-home income of an average £17,500 will hit this mark for most people, says the survey by Barclays Bank.
Most retirement savers reckon this amount will give them a “relatively modest but comfortable” pension income.
The research looked at how what retirement savers wanted as a lifestyle in their later years rather than how much money they were saving.
A defined contribution scheme is a pension offering a non-guaranteed return based on fund performance rather than a defined benefit pension that gives a guaranteed retirement income.
The poll revealed most people had modest financial expectations for retirement.
The top four financial desires for retirement were:
- Having enough income to pay day-to-day living costs
- Settling debts by the time pension savers gave up work
- Taking a fortnight’s holiday overseas once a year
- Affording to run a car
Analysts took these expectations and costed them to arrive at the £17,500 a year pension figure.
The survey did reveal financial expectations vary slightly for pension savers of different ages.
Younger savers in the 19 to 33 years old age group consider they need £18,200 a year, while those aged 34 to 53 wanted £17,300 and the 54 to 69 years old age group were looking for £17,300.
“Besides looking at how much money people feel they need for retirement, the report also looks at how they make decisions about retirement saving,” said a Barclay’s spokesman.
“Many felt they needed more guidance in making the right financial decisions and had some anxiety because they felt they were not receiving the help they wanted.”
The bank suggests that employers running defined contribution pension schemes should offer this guidance.
“Increasing contributions gradually over time and better savings advice would definitely make people feel better about their financial planning for retirement and probably give them a larger pension pot.”
According to the research, 82% of workers would welcome help with their retirement planning. Two-thirds thought the government should have a role in giving this advice, while 47% considered their employers could do more to help them.
However, 93% of defined contribution retirement savers agreed that the major responsibility for putting enough money aside for their pension was their personal responsibility.