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<\/p>\nLife can feel like a constant balancing act in your 40s or 50s.<\/p>\n
Work is often at full tilt and for many family needs and demands can be coming from all sides.<\/p>\n
There’s rarely much spare headspace and pension planning often ends up in the ‘too difficult’ pile. But a comfortable retirement doesn’t just happen.<\/p>\n
Our latest research finds that 41 per cent of people in work between the ages of 25 and 55 are not on track for the retirement income they’ll need. For too many people the conditions which allow them to build savings over a lifetime are out of reach.<\/p>\n
Those aged 40 to 54, Britain’s ‘midlifers’ face the greatest pressures.\u00a0<\/p>\n
Caught between two pension systems: too young to benefit from widespread final salary schemes but already well into their careers when automatic enrolment began in 2012.<\/p>\n
<\/p>\n
L&G group chief exec Antonio Simoes, pictured, believes it’s never too late to get your savings back on track<\/p>\n
One in five in this group did not start saving until after 35. While the median average pot for a midlifer today is \u00a327,000, which will provide a basic retirement income, averages can hide as much as they reveal.<\/p>\n
Just as savings compound over time, so too can inequalities and missed opportunities.\u00a0<\/p>\n
While some people in midlife have bigger pension pots and mortgages that are close to being paid off, others are renting, working part-time or have taken a career break.<\/p>\n
Those renting typically have much lower pension savings and, if they rent into retirement, housing costs could swallow much of their income.\u00a0<\/p>\n
By the mid-2040s, around 30\u00a0per cent of people aged 65 to 69 are expected to be renting. Certain sectors are also more at risk, with hospitality workers especially undersaved.<\/p>\n
The picture is complicated; because there is no such thing as an average saver \u2013 and therefore there is no single fix.<\/p>\n
Financial pressure is clearly part of the story. Among midlife non-savers, around 30 per cent say they simply cannot afford to reduce their take-home pay further.<\/p>\n
What do you need in retirement?\u00a0 <\/p>\n
The widely-used Pensions UK measure finds the minimum a single person needs to get by is \u00a313,400 a year and \u00a321,600 for a couple.<\/p>\n
A moderate lifestyle which covers the essentials plus some splashing out on food and entertainment, trips abroad and running a car, requires \u00a331,700 if you are single and \u00a343,900 if you will be living on a joint income.<\/p>\n
You should aim for \u00a343,900 and \u00a360,600, respectively, for an affluent lifestyle.<\/p>\n
However, these headline targets don’t include income tax, housing costs if you are still paying a mortgage or rent, and care costs in later life.<\/p>\n
> How much will a comfortable retirement cost you?\u00a0<\/a><\/p>\n <!- – ad: https:\/\/mads.dailymail.co.uk\/v8\/us\/money\/moneypensions\/article\/other\/mpu_factbox.html?id=mpu_factbox_1 – ->\n<\/p>\n But behavioural barriers also matter. Minimum contributions can create a false sense of security. Pension decisions are easy to postpone when life is busy.<\/p>\n The encouraging reality is that midlife is not the end point; it’s a hinge point. The average age of an L&G workplace pension customer is 43, they are only at the midpoint of a working life.\u00a0<\/p>\n But, even someone who starts at zero at that age, paying into a pension for the first time with contributions of 8\u00a0per cent could build a savings pot of \u00a3151,000 by the age of 67.<\/p>\n Including State Pension this will result in an annual income of \u00a321,148. That is significant, and even smaller increases, sustained over time, can materially improve outcomes.<\/p>\n We’ve long believed it’s never too early to start saving. But it’s also not too late to get savings back on track.\u00a0<\/p>\n That’s why we are launching a multi\u2011year programme of research, partnership and practical interventions to help rebuild the UK’s financial wellbeing and security.<\/p>\n For those wondering where to start, three steps can help.<\/p>\n First, know your number: check what you have saved and what income it might generate in retirement.<\/p>\n Second, review your assumptions, from retirement age to housing costs.<\/p>\n Third, stress-test your contributions. Even a modest increase, or committing part of a future pay rise, can change the long-term picture.<\/p>\n Of course, individual action can only go so far. Structural barriers remain, particularly for lower earners and the self-employed \u2013 only one in 10 of whom currently contributes to a pension.<\/p>\n
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