A \u201ccomfortable\u201d retirement, as defined by Pensions UK, includes having enough money to spend on luxuries, such as a two-week four-star European holiday, three domestic long-weekend breaks, a new car every five years and regular meals out.<\/p>\n
Fewer than one in 10 of the current working population is on course to enjoy this level of lifestyle.<\/p>\n
The \u00a31.2m figure is based on the pension pot lasting until the retiree couple reach 100 years of age \u2013 a milestone that one in five people<\/a> are poised to reach in the next century.<\/p>\n The sum drops to \u00a31m if the cash is required to last until the age of 93, and stands at \u00a3942,000 for those funding their retirement until they are 90.<\/p>\n The analysis assumes that the full state pension would kick in at age 67, and is based on 2.5pc annual inflation and investment growth of 5pc after fees.<\/p>\n In the past, workers did not have to worry so much about funding their retirement. Many employers offered \u201cdefined benefit\u201d-style pension plans that paid a guaranteed, inflation-linked income for life.<\/p>\n However, today most private sector workers rely on defined contribution schemes where the size of your pot is determined by investment performance.<\/p>\n Most retirees open \u201cdrawdown\u201d accounts, which allow a regular or ad-hoc income to be taken from a portfolio that remains invested through retirement. The strength of investment returns combined with the level and timing of withdrawals determines how long the pension will last.<\/p>\n