Most of them, including me, also fancied retiring sometime between immediately and age 65. However, just how much money do you need to be able to live the life you dream of after you have finished working? Sometimes it is better to start backwards.
For example, if, like me, you fancy eating out at least twice a week, then, using a modest cost of, say, £35 a head, you need £3,640 a year net or about £4,550 grossed up at 20% tax. Add to this the cost of flights and hotels for the exotic holidays I want to go on and it soon mounts up, never mind factoring in the regular essentials of getting your hair cut and paying the gas bill.
This was brought home to a group of employees, and especially me, who volunteered to live off the basic state pension for a week last year. Working with charity Age UK, we asked employees to live on £70 for seven days, and this had to include everything: food, going out, toiletries and savings.
By the end of the week, 58% of volunteers said they would change their retirement plans. Pension contributions were increased, empathy was expressed with retired family and friends, aspirational retirement ages were changed, and people vowed to save more and spend less. There is nothing like experiencing a bit of reality to shock the system.
Rosemary Lemon is group head of reward and executive remuneration at Legal and General
