23% of employees unsure of pension size needed to achieve retirement income

pension size retirement incomeNearly one-quarter (23%) of UK employees are unsure of the size of pension pot they require to achieve their desired retirement income, according to research by online pension provider PensionBee.

Its survey of 1,000 working-age UK adults also found that 15% of respondents thought they would need a pension pot of less than £150,000, while 14% estimated they would require a retirement income of between £150,001 and £250,000.

Just 7% thought they would need a pension fund worth between £450,001 and £550,000, and 4% estimated requiring between £950,001 and £1,050,000.

When asked if they felt on track to achieve their desired retirement income, almost half (43%) did not think they were. More respondents felt unsure about their progress than confident they were on track, at 30% and 27%, respectively. Just 8% thought they were currently on track to achieve their desired retirement income.

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Becky O’Connor, director of public affairs at PensionBee, said: “It’s hard to plan for retirement without an idea of how much you might need, yet most Brits seem to be unaware of, or worse, dangerously underestimate, the true cost of retirement. A good pension pot is one that can provide enough money for the duration of retirement. As this exact amount will vary based on individual circumstances, pension calculators can be a helpful tool in setting financial goals and adjusting behaviours to achieve them.

“However, one rule is broadly true: the earlier individuals start paying into a pension, the more likely they are to be able to afford their desired lifestyle, as their pension has longer to grow and the amount they’re required to save each month reduces. Consolidating old pensions into one easy-to-manage plan can also simplify the retirement planning process, by providing greater visibility, to make it easier to stay on track for later life.”