Great Expectations: £330k average gulf in pension pots revealed15 April 2015
Research commissioned by investment and financial planning group Tilney Bestinvest shows a huge gulf between peoples’ targeted levels of retirement income and the amounts they are saving to achieve this.
The consumer research survey* carried out by YouGov for Tilney Bestinvest of over 1,800 GB adults aged 50+ who have paid into a pension plan, revealed that the most common pension pot size was up to £19,999, with 17% of respondents choosing this option. 9% of respondents said the overall value of their pension was £20,000 to £39,999; the second most popular option.
However, when asked what they thought an adequate and comfortable annual income in retirement was, ‘more than £15,000, up to £20,000’ was chosen by 26% of those surveyed. A pension pot of £350,000 would be required to reach this figure.
To demonstrate the disconnect further, Tilney Bestinvest has crunched the numbers to show the pension pots required for the four most popular annual income bands in the survey. Overall, 72% of those surveyed chose these four options.
Assumes 65 year old male, single life, level annuity that includes a 10-year guaranteed period is purchased. Annuitant is in good health and does not smoke.
David Smith, Financial Planning Director at Tilney Bestinvest commented: “A huge gulf exists for many between how much is required to save and the reality of how much they are putting away. People approaching retirement are often underprepared with how to cope with the gap in these assets, and can vastly overestimate the income they will have in retirement.
“There are only three ways to address this; working longer, saving considerably more and achieving strong investment performance. For many continuing to work in retirement may be a positive lifestyle choice, for others this will simply be a financial necessity. For those who want to enjoy a restful retirement, the only answer is to save and invest considerable sums during working life and to make sure the investments are firing on all cylinders.”
For further comment David Smith can be contacted at firstname.lastname@example.org / 0191 269 9970
*All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,311 adults aged 50 or over of which 1,851 have paid into a pension plan. Fieldwork was undertaken between 25th - 27th March 2015. The survey was carried out online. The figures have been weighted and are representative of all GB adults.
Q: Approximately, how much annual income (in today’s value) do you feel would be adequate to live off comfortably, not extravagantly, in your retirement? (Please select the option that best applies)
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About Tilney Bestinvest
Tilney Bestinvest is a leading investment and financial planning firm that builds on a heritage of more than 150 years. We look after more than £9 billion of assets on our clients’ behalf and pride ourselves on offering the very highest levels of professional client service with transparent, competitive pricing across our entire range of solutions.
We offer a range of services for clients whether they would like to have their investments managed by us, require the support of a highly qualified adviser, prefer to make their own investment decisions or want to take more than one approach. We also have a nationwide team of expert financial planners to help clients with all aspects of financial planning, including retirement planning.
We have won numerous awards including UK Wealth Manager of the Year, Low-cost SIPP Provider of the Year and Self-select ISA Provider of the Year 2013, as voted by readers of the Financial Times and Investors Chronicle. We are pleased that our greatest source of new business is personal referrals from existing clients.
Headquartered in Mayfair, London, Tilney Bestinvest employs almost 400 staff across our network of offices, giving us full UK coverage, and we combine our award-winning research and expertise to provide a personalised service to clients whatever their investment needs.
The Tilney Bestinvest Group of Companies comprises the firms Bestinvest (Brokers) Ltd (Reg. No. 2830297), Tilney Investment Management (Reg. No. 02010520), Bestinvest (Consultants) Ltd (Reg. No. 1550116) and HW Financial Services Ltd (Reg. No. 02030706) all of which are authorised and regulated by the Financial Conduct Authority. Registered office: 6 Chesterfield Gardens, Mayfair, W1J 5BQ.
For further information, please visit: www.tilneybestinvest.co.uk
Tilney is a leading investment and financial planning group that builds on a heritage of more than 180 years. Our clients are private investors, charities and professional intermediaries who trust us with over £23 billion of their assets. We offer a range of services including financial planning, investment management and advice and, through our Bestinvest service, a leading online platform for those who prefer to manage their own investments.
We have won numerous awards. Tilney has been awarded Best Conventional Advisory Service at the 2018 City of London Wealth Management Awards, Best Advisory Service in the 2015 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. Bestinvest was voted Best SIPP Provider and Best Fund Platform at the 2017 City of London Wealth Management Awards, Best Direct SIPP Provider at the YourMoney.com Awards 2017, Best Stocks & Shares ISA Provider at the 2017 Shares Awards, as well as Best Self Select ISA Provider, Best Online/Execution-only Stockbroker and Best Investment Platform 2017 at the FT and Investors Chronicle Investment and Wealth Management Awards, as voted by readers of the FT and Investors Chronicle.
Headquartered in Mayfair, London, the Tilney Group employs over 1,000 staff across our network of 30 offices, enabling us to support clients with a local service throughout the UK.