Most of us know we should be saving more for retirement and the government knows that we need to save more too. That’s why they give pensions tax breaks and employers are being forced to auto enrole staff into pension schemes and make payments.
But how many of us stand a chance of saving £400k into our pensions? it’s a huge amount of money and yet it only buys a modest pension.
And it doesn’t sound like you can rely a on state pension or credit either, article below from Investors Chronicle…
A pensioner couple needs a weekly budget of £231 to meet a minimum income standard (£12,000 a year) that allows them to participate fully in society, according to the Joseph Rowntree Foundation. That £12,000 will enable them to eat out once a month and holiday away from home once a year on a half-board coach-tour package.
This may seem quite a modest amount. In fact, the income level guaranteed for pensioners by Pension Credit in 2012 is just over what is needed to meet the minimum income standard, and the proposed universal pension will be more. But don’t let that lull you into complacency.
The universal pension is just a proposal at the moment, and if you have investments, you are unlikely to qualify for the current Pension Credit, meaning £12,000 becomes a significant ball-park figure on which to base your investment plans.
Breakdown of minimum income standard for pensioner couple
|Item||£ per week|
|Other housing costs||£4|
|Personal goods and services||£20.33|
|Other travel costs||£13.51|
|Social and cultural participation||£49.53|
Source: Joseph Rowntree Foundation, July 2012