Without professional advice, it can be very difficult to know if you’re saving enough for your retirement. It’s unsurprising then that many savers who took part in a survey5 carried out by the Pensions & Lifetime Savings Association (PLSA) believe that saving and planning would be made easier by having retirement income targets available, a concept that is currently used successfully in Australia.
The PLSA proposes three levels of target that would equate to ‘minimum’, ‘modest’, and ‘comfortable’ levels of income in retirement. These, it believes, would give savers a tangible target to aim for, and encourage them to keep their pension plan under regular review. Its research also highlighted a worrying finding: 51% of those surveyed wrongly thought that the auto-enrolment minimum pension contribution level represents a recommended amount of money that should be saved. However, this isn’t the case and the PLSA is calling for the minimum level (8% from April 2019) to increase to what they believe is a more realistic figure of 12% of salary between 2025 and 2030.
51% of those surveyed wrongly thought that the auto-enrolment minimum pension contribution level represents a recommended amount of money that should be saved.