Due to the rising cost of living<\/a>, coupled with longer life expectancies,<\/a> 18- to 30-year-olds need \u00a31,183,363 to stay financially independent until age 90 after retirement,<\/a> according to a new study.<\/p>\n The analysis was conducted by investment and insurance company Shepherds Friendly, using average UK household spending rates, common debt, and a recommended six-month emergency fund.<\/p>\n The investigation also factored in 25 years of rising costs at 2.88 per cent annual inflation and a 5 per cent annual return on savings or investments, to reveal exactly how much would be needed today to enjoy 25 years of financial freedom in retirement.<\/p>\n<\/p>\n Max Jarrold, chief growth officer at Shepherds Friendly, said: \u201cYoung people today are facing the toughest journey to financial independence of any generation. Our research shows that the target for 25 years of financial independence in retirement now stands at more than \u00a3740,000, a number that hits younger adults hardest because they must prepare for far more years of expenses in a highly volatile economic climate, grappling with rising living costs, longer life expectancy, and the compounding effect of inflation. <\/p>\n \u201cSomeone in their 20s may need to fund over 60 years of living costs, while the figure falls for older age groups simply because there are fewer years to cover. For people in their 30s and 40s, costs jump again because this is often the most expensive stage of life, with mortgages, childcare and everyday spending at their highest, but with less time for savings to grow.<\/p>\n \u201cThis combination of higher outgoings and shorter saving windows makes financial freedom especially challenging, and with young people having to do more with less, careful planning has never been more important.\u201d <\/p>\n Individuals in their 50s and early 60s may need just under \u00a31 million, while those aged 65 to 74 require around \u00a3500,000. For people over 74, the amount drops further to approximately \u00a3180,000.<\/p>\n The average UK household would need to save \u00a3743,338 to enjoy 25 years of financial independence. This is based on an average annual expenditure of \u00a331,653, amounting to \u00a31,168,765 over 25 years with inflation, plus typical household debt of \u00a3121,525 and a six-month emergency fund.<\/p>\n Get a free fractional share worth up to \u00a3100. Terms and conditions apply.<\/p>\n Go to website<\/a><\/p>\n ADVERTISEMENT<\/p>\n Get a free fractional share worth up to \u00a3100. Terms and conditions apply.<\/p>\n![\"Trading](\"https:\/\/static.independent.co.uk\/static-assets\/images\/mobile-stores\/Trading_212.svg\")
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Capital at risk.<\/p>\n